Torch Industries is owed $50,000 three years from today. To state that payment in today’s dollars you divide it by (1+r)^3. What is that operation called, and which direction does it move the cash flow?

Blue Delta’s bank quotes 8.4% APR, compounded quarterly, on a savings account. What effective annual rate (APY) does the account actually pay?

Cedar Ridge put $18,000 into a private fund exactly 11 years ago and has taken no cash out and put no cash in since. The position is worth $47,000 today. Interest compounds annually. What annual rate of return did the fund earn?

Maroon Brands can buy a food truck for $95,000. The truck is expected to generate $2,000 of net cash flow at the end of every month for 5 years, after which it is worth nothing. Maroon Brands’ cost of capital is 9% APR with monthly compounding. What is the NPV of buying the truck?

You retire with $780,000 in an account paying 6% APR with monthly compounding, and you withdraw $5,500 at the end of every month. How long will the money last?

Maroon Brands parks cash in an account earning 6% per year. Using the Rule of 72, about how long until the balance doubles, and about how long until it quadruples?

Maroon Brands parks cash in an account earning 6% per year. Using the Rule of 72, about how long until the balance doubles, and about how long until it quadruples?

Maroon Brands borrows $525,000 to build a commissary and repays it with 120 equal monthly payments at 7.8% APR (monthly compounding), the first payment due one month after the loan is made. How much of payment number 45 is interest?

Magnolia Foods is endowing a permanent scholarship with a $340,000 gift. The fund earns 4.25% per year forever, the first scholarship is paid one year from today, and every payment after that must be exactly 2% larger than the one before it, forever. How large can the first scholarship payment be?

Magnolia Foods is endowing a permanent scholarship with a $340,000 gift. The fund earns 4.25% per year forever, the first scholarship is paid one year from today, and every payment after that must be exactly 2% larger than the one before it, forever. How large can the first scholarship payment be?