3. If you deposit $1,600 in an account paying 8% today and deposit $1,600 every year into...

3. If you deposit $1,600 in an account paying 8% today and deposit $1,600 every year into the account, how much will you have in 4 years?

4. The average price for a new car today is $29,000. If the rate of inflation is expected to be 3.5% annually, what will a new car cost in 7 years?

5. You bought a stock 7 years ago for $45. Today, the stock is selling for $79. If you sell today, what rate of return have you earned on the stock?

Solutions

Expert Solution

rate positively ..

Ans 3)	We have to use financial calculator to solve this
	put in calculator

	PV	-1600
	PMT	-1600
	I	8%
	N	4

	Compute FV	$9,386.56

	Ans=	$9,386.56

Ans 4)	Price after 7 year =	$ 36,896.10
	29,000*(1+3.5%)^7

	Ans =		$ 36,896.10

Ans 5)	We have to use financial calculator to solve this
	put in calculator

	FV		79
	PV		-45
	PMT		0
	N		7

	Compute I		8.37%

	Ans =		8.37%

jeff jeffy answered 2 years ago

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