Question

1.) If you invest $15,000 today what interest rate would you have to earn to have $57,000 in 18 years? ENTER YOUR ANSWER AS A PERCENTAGE WITH ONE DECIMAL PLACE (e.g., 12.1) AND NOT AS A DECIMAL (e.g., 0.121). ROUND TO THE NEAREST TENTH OF A PERCENT. DO NOT USE THE PERCENT SIGN (%) IN YOUR ANSWER.

2.) If you invest $16,000 today, how long would it take until you have $61,000 if you have an interest rate of 16%? Round to 2 decimal places

3.) How much would you have to invest for 16 years with an interest rate of 16% if you want to have a future value of $36,045,000? DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST DOLLAR. LIST THE NUMBER AS A POSITIVE NUMBER.

4.) How much would you have after 22 years with an interest rate of 10% if you invest $77,000 today? DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST DOLLAR. LIST THE NUMBER AS A POSITIVE NUMBER.

5.) Adam and Ashley both graduate from Dalton State and begin working as financial analysts. They will both work for exactly 40 years and then retire. Both plan to save for retirement, however each goes about it differently. Ashley begins saving $6,000 per year for ten years, beginning at the end of her first year on the job. Adam wants to travel and buy nice furniture for his house and allows those ten years to pass before he begins saving for retirement (note: he begins saving at the end of the 11^th year). He saves $6,000 per year (for 30 years) until he retires. If they both get a 11.00% interest rate, how much more will Ashley have at retirement compared to Adam? DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST DOLLAR

Answer 1

1)i= [Future value/present value ] ^1/n     -1

       =[57000/15000]^1/18    -1

       = [3.8]^.05556   - 1

       = 1.077 - 1

        = .077 or 7.7%

2)

n = [IN(future value/present value)]/IN [1+i]

          =IN 3.8125 /IN (1+.16)

         = 1.33829 / .14842

        = 9.02 years

3)Amount to invest = PVF 16%,16 *future value

                  =.09304* 36045000

                  = 3,353,626.8 [rounded to 3353627]

**find present value factor from table or using the formula 1/(1+i)^n

4)Future value = Amount invested today * (1+i)^n

             = 77000* (1+.10)^22

             = 77000 * 8.14027

             = 626,800.79 [rounded to 626801]