1.If you make a one-time investment of $30,000 into an account that earns 7 percent annual return,...
Question:
1.If you make a one-time investment of $30,000 into an account that earns 7 percent annual return, how much will you have in the account in 35 years? Assume annual compounding.
2.Your grandfather just placed a one-time deposit of $500,000 in a trust fund for you. If the fund will be worth $2,000,000 in 20 years, what is the annual rate of return on the trust fund? Assume annual compounding.
3.If you make a one-time deposit of $10,000 today in an investment account that earns 8 percent annual return, how long will it take to have $40,000 in the account?
4.You open an account and make a deposit today. You plan to make the following withdrawals from the account. The first withdrawal will occur 4 years from today (i.e., no withdrawals in years 1, 2, and 3).The remaining withdrawals will be in years 5, 6, 7, and 8 from now.The annual rate of return is 7 percent for years 1 through 3 and 10 percent for years 4 through 8.How much do you have to deposit into the account today?
__________________________________________
Year (from today)Withdrawal
___________________________________________
4$10,000
5$15,000
6$25,000
7$30,000
8$40,000
_________________________________________