1. Charlie just hit the jackpot in Las Vegas and won \($30,000\)! If he invests it now, at a 14% interest rate, how much will it be worth fifteen years from now?

2. Roderick would like to have \($3,000,000\) saved by the time he retires in 40 years. How much does he need to invest now at a 10% interest rate to fund his retirement goal?

3. Assume that Penny accumulates savings of \($2\) million by the time she retires. If she invests this savings at 12%, how much money will she be able to withdraw at the end of each year for fifteen years?

4. Caryne plans to invest \($3,000\) at the end of each year for the next eight years.

Assuming a 14% interest rate, what will her investment be worth eight years from now?

5. Assuming a 6% interest rate, how much would Alejandra have to invest now to be able to withdraw \($12,000\) at the end of every year for the next nine years?

6. Darren is considering a capital investment that costs \($500,000\) and will provide the following net cash inflows:

Using a hurdle rate of 12%, find the NPV of the investment.
7. What is the IRR of the capital investment described in question 6?

Transcribed Image Text:

Year 1 2 3 Net Cash Inflow $308,000 $205,000 $102,000