Practice Exercises

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Showing 15 / 15 exercises

Future Value with Quarterly Compounding

tvm-real-001

Fundamentals
Single Sums

An investor deposits **$5,000** into an account that pays a stated annual interest rate of **8%**, compounded **quarterly**. Calculate the value of the account at the end of **3 years**.

10 steps

Present Value of a Lump Sum

tvm-real-002

Fundamentals
Single Sums

A client requires **$100,000** in **5 years** to fund a business expansion. If they can earn a **6%** annual return compounded **monthly**, how much must they invest today?

10 steps

Solving for Growth Rate (CAGR)

tvm-real-003

Mode Switching
Single Sums

A company’s earnings per share (EPS) increased from **$2.50** to **$3.80** over a **6-year** period. Calculate the compound annual growth rate (CAGR).

10 steps

Future Value of Ordinary Annuity

tvm-real-004

Fundamentals
Ordinary Annuity

An investor plans to save **$2,000** at the **end of each year** for **20 years**. If the account earns an annual return of **7.5%**, what is the value at the end?

10 steps

Retirement Funding (PV of Annuity)

tvm-real-005

Mode Switching
Ordinary Annuity

A retiree wants to receive **$45,000** at the **end of each year** for **25 years**. If the fund earns **5%** annually, how much is needed in the fund today?

10 steps

Car Loan Payment Calculation

tvm-real-006

Mode Switching
Ordinary AnnuityAmortization

A borrower takes out a **$25,000** car loan with a **4-year** term and a **6%** annual interest rate, compounded **monthly**. Calculate the monthly payment.

10 steps

Education Savings (Annuity Due)

tvm-real-007

Exam Traps
Annuity Due

A parent plans to invest **$3,000** at the **beginning of each year** for **18 years**. If the account earns **6%** annually, what is the accumulated value?

16 steps

Lease Liability (PV of Annuity Due)

tvm-real-008

Exam Traps
Annuity Due

A company leases a machine for **5 years** requiring annual payments of **$10,000** starting **immediately**. The discount rate is **8%**. Calculate the PV of the lease liability.

16 steps

Net Present Value (NPV) Calculation

tvm-real-009

Mode Switching
Uneven Cash Flows

An investment requires **$100,000** today. It generates **$30,000** in Year 1, **$40,000** in Year 2, and **$50,000** in Year 3. Required return is **10%**. Calculate NPV.

22 steps

Internal Rate of Return (IRR)

tvm-real-010

Mode Switching
Uneven Cash Flows

A project costs **$50,000** today and generates **$15,000**, **$20,000**, and **$25,000** over the next three years. Calculate the IRR.

19 steps

Mortgage Interest Calculation

tvm-real-011

Exam Traps
Amortization

A **$300,000** mortgage for **30 years** at **4.5%** (monthly compounding). Calculate the **interest portion** of the **first monthly payment**.

19 steps

Effective Annual Rate (EAR)

tvm-real-012

Mode Switching
Interest Conversion

A credit card charges a nominal annual rate of **18%**, compounded **daily** (365 days). Calculate the Effective Annual Rate (EAR).

10 steps

Deferred Perpetuity PV

tvm-real-013

Exam Traps
Uneven Cash Flows

An investment pays **$1,000** per year forever, with the first payment occurring **4 years** from today. Discount rate is **5%**. Calculate PV.

10 steps

College Funding (Two-Stage)

tvm-real-014

Exam Traps
Single Sums

Need **$25,000** per year for **4 years**, first payment **10 years** from today. Earn **6%**. How much to deposit **today**?

10 steps

Principal Repayment

tvm-real-015

Exam Traps
Amortization

Mortgage **$300,000**, **30 years**, **4.5%** monthly. Calculate the **principal portion** of the **second monthly payment**.

20 steps

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