3 Future Value of a Lump Sum 4 5 1) You have just invested $10,000 in a Certificate of Deposit (CD). You will earn a rate of 4% annually. 6 The CD has a duration (time invested) of 3 years. What amount will you have at the end of the three years? 7 8 9 10 11 12 2) For your 21'st birthday your parents opened up an individual retirement account (IRA) for you (worst present ever 13 They put an initial deposit in of $5,000. You invest well and earn a return of 9% over the next 44 years 14 until you retire. How much will be in your IRA when you retire at age 65? 15