1)Assume the total cost of a college education will be $320,000 when your child enters college in 18 years. You presently have $67,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your childs college education?

Present value Years Interest rate Future value

2) Youre trying to save to buy a new $120,000 Ferrari. You have $40,000 today that can be invested at your bank. The bank pays 5.5 percent annual interest on its accounts. How long will it be before you have enough to buy the car?

Present value Years Interest rate Future value

3) You have just made your first $2,000 contribution to your individual retirement account. Assuming you earn a 9 percent rate of return and make no additional contributions, what will your account be worth when you retire in 45 years?

Present value Years Interest rate Future value