Beruflich Dokumente
Kultur Dokumente
Name_____________ Date________
. [1 mark]
31. Show the calculations. A person buys a home for $300 000 on June 1st, 2016. The
home value increases 3% each year. What is the value of the home at each of these
times in the future? :
a) June 2017?
b) June 2018?
c) June 2026?
[3 marks]
32. What is meant by home equity? Give a numeric example to support your
explanation. [2 marks]
b) Show how to calculate the amount of money needed for the mortgage.
c) How much equity would you have in the property on the date purchased?
d) Assume the property increase in value by 2.5% yearly, calculate the value of
the property each year for the next 5 years. Use a data table with appropriate column
titles to display the information.
34. Determine the future value of a single investment of $1000 at 4% per year,
compounded annually, for 45 years. [5 marks]
35. Draw a time line diagram to represent an annuity situation where $200 per month
is invested into an account for six months, at an annual interest rate of 4%. Calculate
the future value of the annuity. [5 marks]
Key Purpose/Features
What does this mean?
How does it work?
RESP
RRIF
37. Use a TVM calculator (see teacher). In the table below, write the meaning of each
of the variables represented in the Time-Value-of-Money app:
[Information only]
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT:END
BEGIN
Number of payments
Annual interest rate
Present Value
Regular Payment
Future Value
Number of payments per year
Number of compounding intervals per year
<Are payments made at the end or beginning?>
Conclusion:
N=
I%=
12
PV=
PMT=
FV=
P/Y=
C/Y=
PMT:END
BEGIN
Doubling the Interest
Rate?
N=
I%=
PV=
PMT=
FV=
P/Y=
4
C/Y=
PMT:END
BEGIN
Doubling the
frequency of the
payments and also
doubling the
compounding
frequency?
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT:END
BEGIN
Doubling the payment
amount and
compounding
frequency to four
times each year?
[20 marks]
[TVM solver/Spreadsheet/Graphing Software - Solve problems using technology that involve the amount, the
present value, and the regular payment of an ordinary simple annuity.]