Finance is a math-oriented subject matter and every course in finance must incorporate an element of problem solving into at least some assignments. In this assignment, you will solve and then evaluate several time value of money problems.

Time value of money is perhaps one of the most powerful concepts in the entire world. Literally, trillions of dollars of securities trade hands every day and the price that all of these transactions sell for is determined using the time value of money. Time value of money (henceforth, TVM) influences countless numbers of people, every day of their lives (whether they realize it or not):

Have you ever taken out a loan (auto, house, credit card, student loan, etc.)? How is the monthly payment determined? TVM!
How is payoff on a loan at any point in time determined? TVM!
The total value of all debt outstanding in the U.S. at the end of 2014 was in excess of $150 trillion!!! Over $900 billion of debt securities trade hands in the U.S. every DAY!!! All debt values are determined by TVM!
Do you own any stock? Approximately, 54% of all U.S. households (i.e., over 64 million people) own stock in some form (either in individual companies, mutual funds, 401K pension or retirement accounts). The total value of all stocks in the U.S. at end of 2014 was in excess of $125 trillion! The average daily trading value of stocks in the U.S. is over $250 billion! All stock values and prices are determined by TVM!
Insurance companies use TVM to determine what to charge for premiums.
Lease and rental companies use TVM to determine rates.
Basically 100% of all corporations in the U.S. use TVM to make capital budgeting (i.e., long-term investment) decisions. These decisions include issues such as building a new factory, bringing a new product to the market, expanding into new markets, opening new stores, R&D spending, and so forth.
Note that detailed solutions to all odd numbered problems in Higgins (2015) are provided at the end of the book (beginning on page 405). For this assignment, you must recalculate the answers for all problems in question 1 of Chapter 7 (pages 282-283) with a specific value altered. You must then provide a written logical explanation for why the calculated values are different.

Redo all of the Time Value of Money problems in question 1 (i.e., parts a, b, c, d, e, f, g and i – omit h) assuming that the interest rate is 6% and then again assuming that the interest rate is 10%. Thus, you will have solutions to each of these problems with interest rates of 6%, 8% (given in the book), and 10%. For each question (i.e., parts a, b, c, d, e, f, g, and i), insert a table into your Word file that lists the question number, the answer with a rate of 6%, the answer with a rate of 8% and the answer with a rate of 10%. Then, for EACH questions (i.e., parts a, b, c, d, e, f, g and i), provide a brief written logical explanation/statement for why the values you calculated for an interest rate of 6% and an interest rate of 10% is either greater than or less than the answer where the interest rate is 8%.
Do the same for all of the Rate of Return problems in question 1 other than questions n and o (i.e., parts j, k, l and m), but assume that for each question the number of years is 1 less than the number in the problem and then that the number of years is 1 greater than the number of years in the problem (for example, for question j, compute the answer assuming that the investment returns $61,000 in 49 years and then the answer assuming that the investment returns $61,000 in 51 years; you will then compare the IRR for 49 years, 50 years, and 51 years).
Do the same for all of the bank loan, bond, and stock problems (i.e., parts p, q, r, and s) assuming that the interest rate is 6% and then again assuming that the interest rate is 10% (note that the solutions at the end of the book assume an interest rate of 8%). Provide a brief written logical explanation/statement for your answers as in Part 1.
Length: 4-6 pages, excluding title page and any references that you use

Your explanations for each question part should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect graduate-level writing and APA standards. Be sure to adhere to Northcentral University’s Academic Integrity Policy.