6. Your parents will retire in 21 years. They currently have $400,000, 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 additional funds? Round your answer to two decimal places.

7.

Future value: annuity versus annuity due

1. What's the future value of a 10%, 5-year ordinary annuity that pays $200 each year? Round your answer to the nearest cent.
2. If this was an annuity due, what would its future value be? Round your answer to the nearest cent.

8

Present and future values for different periods

Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually. Round your answers to the nearest cent.

1. An initial $500 compounded for 1 year at 10%.

   $

2. An initial $500 compounded for 2 years at 10%.

   $

3. The present value of $500 due in 1 year at a discount rate of 10%.

   $

4. The present value of $500 due in 2 years at a discount rate of 10%.

   $

9

Future value

If you deposit $12,000 in a bank account that pays 9% interest annually, how much would be in your account after 5 years? Round your answer to the nearest cent.

10

Future value of an annuity

Find the future values of these ordinary annuities. Compounding occurs once a year. Round your answers to the nearest cent.

Rework previous parts assuming that they are annuities due. Round your answers to the nearest cent.

1. $800 per year for 2 years at 4%.

   $

2. $400 per year for 1 year at 2%.

   $

3. $800 per year for 8 years at 0%.

   $

4. $800 per year for 2 years at 4%.

   $

5. $400 per year for 1 year at 2%.

   $

6. $800 per year for 8 years at 0%.

   $