Question

Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dollar.)

a. How much would you have to deposit today if you wanted to have $48,000 in four years? Annual interest rate is 9%.
b. Assume that you are saving up for a trip around the world when you graduate in two years. If you can earn 8% on your investments, how much would you have to deposit today to have $12,500 when you graduate? (Round your answer to 2 decimal places.)
c-1. Calculate the future value of an investment of $571 for nine years earning an interest of 10%. (Round your answer to 2 decimal places.)
c-2. Would you rather have $571 now or $1,000 nine years from now?
d. Assume that a college parking sticker today costs $70. If the cost of parking is increasing at the rate of 5% per year, how much will the college parking sticker cost in eight years? (Round your answer to 2 decimal places.)
e. Assume that the average price of a new home is $116,000. If the cost of a new home is increasing at a rate of 8% per year, how much will a new home cost in ten years? (Round your answer to 2 decimal places.)
f. An investment will pay you $7,500 in 10 years, and it will also pay you $250 at the end of each of the next 10 years (years 1 thru 10). If the annual interest rate is 6%, how much would you be willing to pay today for this type of investment? (Round your intermediate calculations and final answer to the nearest whole dollar.)
g. A college student is reported in the newspaper as having won $8,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $8 million now. Instead she will receive $400,000 at the end of the year for each of the next 20 years. If the annual interest rate is 6%, what is the present value (today’s amount’) that she won? (ignore taxes). (Round your answer to nearest whole dollar.)

Answer 1