The preceding problems can be solved using the interest tables supplied in Appendix A.

To test your ability to construct your own interest factors or to use a financial calculator, solve the following problems.

a) You place $1,300 in a savings account that pays 5.3 percent annually. How much will you have in the account at the end of six years and three months?

b) You invest $1,000 annually for seven years and earn 7.65 percent annually. How much interest will you have accumulated at the end of the seventh year?

c) An investment promises to pay you $10,000 each year for ten years. If you want to earn 8.42 percent on your investments, what is the maximum price you should pay for this asset?

d) You bought a stock for $10 a share and sold it for $25.60 after 5½ years. What was your annual return (rate of growth) on the investment?

e) You can earn 7.2 percent annually; how much must you invest annually to accumulate

$50,000 after five years?