Suppose that I am trying to borrow money from you to finance my business. And suppose that I promise to repay you in two installments, one payment in two years of $5,000 and one payment in four years for $10,000. If your opportunity cost of funds is 10%, how much are you willing to lend me?
Answer: $10,962
Learn More :
Personal Finance
- Consumer Reports (www.consumerreports.org) is an organization dedicated to credit counseling.
- Before beginning to search for car loans it is a good idea for people to review their __________.
- A used car owner is the first person contacted when something is recalled and even has legal recourse if he or she encounters a problem that the automobile dealer or manufacturer is unable to resolve.
- There are no reputable online lenders that offer car loans.
- Automobile dealers typically:
- ________ is a just a financial term that means equal payments at equal time intervals.
- Waiting to start investing significantly reduces the amount of money available later on.
- The present value of an annuity allows easy calculation of what a series of regular payments to be received in the future is worth today.
- The future value of a lump sum is used to calculate what a future dollar amount is worth today.
- Annuity is a just a financial term that means equal payments at equal time intervals.
- The present value of an annuity calculates how much a regular series of payments will be worth at some point in the future.
- The present value of a lump sum is used to calculate what a future dollar amount is worth today.
- By not understanding the basic concept of the time value of money (TVM) people make poor financial decisions all the time.
- Budgeting is the power of the time value of money.
- There is no difference between a financial calculator and any other calculator.
- A(n) __________ is simply the same amount of money invested or paid on a regular schedule, such as weekly, monthly, or annually.
- In 1992 Robert could buy a Super Sugar Deluxe chocolate candy bar for $1. Today in 2012 he pays $2.50 to buy a new and improved Extra Super Sugar Deluxe chocolate candy bar. What inflation rate caused Robert's chocolate habit to increase by $1.50 over the last 20 years?
- A lot of different financial calculators are available to use in time value of money calculations.
- Understanding time value of money is not necessary to making good financial decisions.
- To answer any time value of money question, at least three of the five pieces of information must be known.
- No understanding of time value of money or a financial calculator is necessary to improve financial capability.
- Money stuffed in a mattress is not subject to the time value of money.
- The concept of time value of money (TVM) leads to poor financial decisions all the time.
- The future value of an annuity calculates how much a regular series of payments will be worth at some point in the future.
- Only one financial calculator is available to use in time value of money calculations.
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.