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144 PRESENT VALUE AT coMPOUND INTEREST 12. HoME REMODEL Daisy Wadsworth knows she will receive a bonus of S12.00 months and decides to remodel her home. She does n want to borrow more than she can repay using her bonus. Although the bank usually does not make short. she has a good relationship with her banker and he lends her the funds at 9% com pounded monthly. Find the proceeds 13. SMALLGROCERY STORE Jos Martinez, an immigrant from Mexico, estimates that he needs $9000 to start a (very) small grocery store in 3 years. How much must he de- posit today if his credit union will pay 4% compounded quarterly 14. BU DING A SCHOOL Ebbertson County needs an additional s8,000,000 in 4 years to build an elementary school. Assume it can earn 6% compounded quarterly and deter- mine the amount that must be deposited today to satisty this future need. 15. TIME VALUE oF MONEY Assume that money can be invested at 8% compounded quarterly. Which is larger, s2500 now or s3800 in 5 years? (Hint: First find the present value of s3800 compare present val 16. TIME VALUE oF MONEY Assume that money can be invested at 10% compounded y. Which is larger, s3000 now or s7500 in 10 years? (Hint: First find the semiannual present value of S7500; then compare present values.) 17. FUTURE VALUE An investment of $30.000 earns interest of 10% compounded semi- annually for 2 years Find the future value of the investment. If money can be deposited elsewhere for 2 years at 8% compounded quarterly, fin the present value of this future 18. SELLING AN ESTATE Judith McGrath sold her deceased grandfather's home and ac cepted a note for S65.000 with interest of 9% compounded semiannually for 3 years. of this future value if funds can be Find the future van Then find the present va invested elsewhere for 3 years at 6% compounded monthly. 19. CAFE oF MoDERN ART The owner of Cafe of Modern Art signs a note for S16.800 at 10% simple interest for 4 years. Find the maturity value of the note. What should the ng to accept in payment for the note today if funds can be in- holder of the note be w per year compounded quarterly? vested for 4 years at 6% 20. MATURITY VALUE la 6 years. Susan Hessney must pay off a note with a face value of s 12,000 and simple interest of 9% per year. Find the maturity value of the note What should the holder of the note be willing to accept in complete payment today, if money can be invested for 6 years at 6% per year compounded quarterly? 21. vALUING A HAIR SALON Jessie Jones believes her hair salon is worth s20.000 and estimates that its value will grow at 10% per year compounded annually for the next 3 years. If she sells the business. the funds will be invested at 8% compounded quarterly (a) Find the future value if she holds onto the business. (b) What price should she insist on now if she sells the business? 22. BIKE SHOP Andy Sargent figures his bike shop is worth S88.000 if sold today and that it will grow in value at 8% per year compounded annually for the next 6 years. If he sells the business, the funds will be invested at 5% compounded semiannually. (a) Find the future value of the shop. (b) What price should he insist on at this time if he sells the business