Podcast
Questions and Answers
What is the monthly payment amount for a car loan of $24,000 with an interest rate of 2.4% (APR) and a repayment period of six years?
What is the monthly payment amount for a car loan of $24,000 with an interest rate of 2.4% (APR) and a repayment period of six years?
What is today's value of an investment that pays $3,000 at the end of years 1-3 and $7,000 at the end of years 4-8 with an interest rate of 13% annually?
What is today's value of an investment that pays $3,000 at the end of years 1-3 and $7,000 at the end of years 4-8 with an interest rate of 13% annually?
How much money must you have borrowed for a 20-year mortgage if monthly payments are $1,620 and the interest rate is 8.4% (APR)?
How much money must you have borrowed for a 20-year mortgage if monthly payments are $1,620 and the interest rate is 8.4% (APR)?
Considering various investment options with an 8% return, which investment is most valuable?
Considering various investment options with an 8% return, which investment is most valuable?
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If you invest a lump sum of $5,000 today and receive $55,000 in 10 years, what is the effective return if compounded annually at 8%?
If you invest a lump sum of $5,000 today and receive $55,000 in 10 years, what is the effective return if compounded annually at 8%?
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Which option provides the least present value if the investment's interest rate is 2.4% annually?
Which option provides the least present value if the investment's interest rate is 2.4% annually?
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What is the total cash flow you would receive if you invested $4,900 at the end of each year for 10 years at an 8% interest rate?
What is the total cash flow you would receive if you invested $4,900 at the end of each year for 10 years at an 8% interest rate?
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If your parents plan to retire in 17 years, how should they invest $1,000 today to maximize their return at an 8% APR?
If your parents plan to retire in 17 years, how should they invest $1,000 today to maximize their return at an 8% APR?
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What is the future value of the existing $150,000 if the account earns 7.7% annually for 20 years without any additional contributions?
What is the future value of the existing $150,000 if the account earns 7.7% annually for 20 years without any additional contributions?
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What is the effective annual rate (EAR) for an account that pays 5.5% interest compounded monthly?
What is the effective annual rate (EAR) for an account that pays 5.5% interest compounded monthly?
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How much must Allison contribute annually to match Leslie's retirement goal of $1,000,000 at 11% APR?
How much must Allison contribute annually to match Leslie's retirement goal of $1,000,000 at 11% APR?
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At what age will Leslie reach her goal of $1,000,000 with additional annual deposits of $8,000 at an interest rate of 14%?
At what age will Leslie reach her goal of $1,000,000 with additional annual deposits of $8,000 at an interest rate of 14%?
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What is the total amount of damages the jury awarded to the woman for her lawsuit, including all components?
What is the total amount of damages the jury awarded to the woman for her lawsuit, including all components?
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How would you calculate the lost wages that the woman would have earned from 2022 to 2025?
How would you calculate the lost wages that the woman would have earned from 2022 to 2025?
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What is the approximate amount Allison would need to invest annually if she wanted to reach her goal at the same time as Leslie?
What is the approximate amount Allison would need to invest annually if she wanted to reach her goal at the same time as Leslie?
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If each twin aims for the same retirement goal but invests different amounts, what is a key factor that could account for the difference in the time to reach their goals?
If each twin aims for the same retirement goal but invests different amounts, what is a key factor that could account for the difference in the time to reach their goals?
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Study Notes
Time Value of Money Calculations
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Car Loan Calculation:
- Loan amount: $24,000
- Interest Rate: 2.4% APR with monthly compounding
- Loan Term: 6 years
- Determine monthly payment amount
-
Investment Calculation:
- Interest rate: 13% annually (APR)
- Investment:
- $3,000 per year for years 1-3
- $7,000 per year for years 4-8
- Calculate the present value of the investment
-
Mortgage Loan Calculation:
- Mortgage term: 20 years
- Interest Rate: 8.4% APR
- Monthly payment: $1620
- Calculate the initial loan amount borrowed
-
Investment Choice:
- Interest rate: 8% APR with annual compounding
- Choose the most valuable investment from given options
-
Retirement Savings Calculation:
- Retirement time: 17 years
- Current savings: $150,000
- Retirement goal: $1,500,000
- Interest rate: 7.7% APR
- Calculate annual contributions needed to reach goal
-
Effective Annual Rate Calculation:
- Interest rate: 5.5% APR compounded monthly
- Calculate the effective annual rate of interest
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Retirement Savings Comparison:
- Twins receive $20,000 each and plan to save for retirement
- Leslie invests $8,000 per year at 14% APR compounded annually
- Allison invests $8,000 per year at 11% APR compounded annually
- Determine how much Allison needs to invest each year to reach $1,000,000 at the same time as Leslie
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Jury Award Calculation:
- Jury award includes lost wages, pain and suffering, and legal expenses
- Woman is unable to work and will not be able to work again
- Calculate the present value of her lost wages for the next 3 years.
- Assume annual salary amounts are received as one lump sum at the end of the year
- She was earning $81,000 in 2022.
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Description
Test your knowledge on time value of money concepts through various calculations including car loans, investments, and mortgages. This quiz will challenge you to determine monthly payments, present values, and necessary contributions for retirement savings based on different financial scenarios.
