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1) Gob signed a lease for a rental unit for 5 years. Under the lease agreement, a deposit of $12,500 is made. The deposit will
1) Gob signed a lease for a rental unit for 5 years. Under the lease agreement, a deposit of $12,500 is made. The deposit will be returned at the expiration of the lease with interest compounded at 5% per year. What amount will Gob receive at the time the lease expires? 2) Lindsay has an investment that pays her $75,000 every year for the next 8 years. However, she would like to sell her investment today to purchase a house. Assume the going market interest rate is 10%, how much would a wise investor be willing to pay for this investment? 3) George Michael wants to save up for a car which he will need when he graduates in 3 years. How much would he have to deposit today, if this amount would earn 6% per year, to have $21,000 when he graduates? 4) George and Lucille decided to invest $2,000 every year for their daughter's college fund until she is 18 (starting on her 1st birthday and including her 18th birthday). How much will be in the savings account on her 18th birthday (efter the last deposit) assuming an interest rate of 6%
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