5-1 FUTURE VALUE If you deposit $2,000 in a bank account that pays 6% interest annually, how much will be in your account after 5 years? 5-2 PRESENT VALUE What is the present value of a security that will pay $29,000 in 20 years if securities of equal risk pay 5% annually? 5-3 FINDING THE REQUIRED INTEREST RATE Your parents will retire in 19 years. They cur- rently have $350,000 saved, and they think they will need $800,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any addi- tional funds? 5-4 TIME FOR A LUMP SUM TO DOUBLE If you deposit money today in an account that pays 4% annual interest, how long will it take to double your money? 5-5 TIME TO REACH A FINANCIAL GOAL You have $33,556.25 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $220,000. You expect to earn 12% annually on the account. How many years will it take to reach your goal? 5-6 FUTURE VALUE: ANNUITY VERSUS ANNUITY DUE What's the future value of a 5%, 5-year ordinary annuity that pays $800 each year? If this was an annuity due, what would its future value be? 5-7 PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 11% annually, what is its present value? Its future value? 5-8 LOAN AMORTIZATION AND EAR You want to buy a car, and a local bank will lend you $40,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest