1. Suppose you are committed to owning a $275,000 Ferrari. If you believe your mutual fund can achieve an annual rate of return of 11.2 percent and you want to buy the car in 9 years (on the day you turn 30), how much must you invest today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

2. You're trying to save to buy a new $160,000 Ferrari. You have $40,000 today that can be invested at your bank. The bank pays 6.0 percent annual interest on its accounts. How long will it be before you have enough to buy the car?

• 24.04 years

• 24.29 years

• 21.79 years

• 23.79 years

• 23.54 years