PPT习题.pdf

Time value of money 1. You have just been offered $10,000 (for your great personality). Another offer comes in: $11,424, but paid one year from now. The interest rate is 12%. (1) Which offer is better? (2) What if you need the money now? Is the second offer still better than the first one? 2. With 12% annual interest rate, what is the FV of $10,000 two years from now? Is it $10,000+$1,200+$1,200=$12,400, or $10,000+$1,200+$1,344=$12,544? 3. The annual interest rate is 12%. Assume that interest is accrued semi-annually. (1) What is the FV of $10,000 two years from now? (2) What is the effective annual interest rate? (3) What is the effective semi -annual interest rate? (4) Without the latter assumption, what is the FV of $1 one year from now? 4.True or False. (1) Yao Ming has made $12 million this year. He will earn $14 million next year. His total salary is $26 million for two years. (2) Tony is going to buy a car that is worth $10,000. The monthly interest rate is 1%. If he finances his purchase through a 2-month car loan, his equal monthly payment will be $5000+$100=$5100. (3) The interest rate is 10%. A financial asset that pays its holder $100 a year forever (called British consols) is priceless; that is, the price is infinity since the sum of infinite annual payments of $100 is infinity. (4) A loan with discount interest is as follows. If a bank loans you $10000 at 10% rate, the interest of $1000 is deducted right away so that you only get $9000. But you will need to repay $10000. The effective interest rate is 10%. Present Value - Formulas and Applications 1.The car is worth $14,000. A 60 -month car loan: $2,000 down payment and $12,000 to borrow. The monthly interest rate is 1%. How much is the equal monthly payment? 2. A home at Downtown Santa Barbara is worth $2 million dollars. Tracy i