Solve various time value of money scenarios (Learning Objective 3)

1. Suppose you invest a sum of $2,500 in an account bearing interest at the rate of 14% per year. What will the investment be worth six years from now?

2. How much would you need to invest now to be able to withdraw $5,000 at the end of every year for the next 20 years? Assume a 12% interest rate.

3. Assume that you want to have $150,000 saved seven years from now. If you can invest your funds at a 6% interest rate, how much do you currently need to invest?

4. Your aunt Betty plans to give you $1,000 at the end of every year for the next ten years. If you invest each of her yearly gifts at a 12% interest rate, how much will they be worth at the end of the ten-year period?

5. $uppose you want to buy a small cabin in the mountains four years from now. You estimate that the property will cost $52,500 at that time. How much money do you need to invest each year in an account bearing interest at the rate of 6 percent per year to accumulate the $52,500 purchase price?,