Question
1. If Bob and Judy combine their savings of $1,300 and $600, respectively, and deposit this amount into an account that pays 1% annual interest,
1. If Bob and Judy combine their savings of $1,300 and $600, respectively, and deposit this amount into an account that pays 1% annual interest, compounded monthly, what will the account balance be after 8 years? The account balance in 8 years will be $________
2. Jack and Jill have just had their first child. If college is expected to cost $150,000 per year in 18 years, how much should the couple begin depositing annually at the end of each year to accumulate enough funds to pay the first year's tuition at the beginning of the 19th year? Assume that they can earn an annual rate of return of 6%on their investment. The amount that the couple should begin depositing annually at the end of each year is $__________
3. Future value calculationWithout referring to the preprogrammed function on your financial calculator, use the basic formula for future value along with the given interest rate, r, and the number of periods, n, to calculate the future value of $1 in the case shown in the following table.(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)
Interest rate, r | Number of periods, n |
|
12% | 9 |
The future value of $1 is $ _______
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