9-46 Exercises in Compound Interest Study Appendix 9. Then answer the following questions: 1. You deposit $10,000. How much will you have in 4 years at (a) 8% compounded annuel and (b) at 12% compounded annually? 2. A savings and loan association offers depositors a $10,000 lump-sum payment 4 years here (a) How much will you be willing to deposit if you desire an interest rate of 8% compounds! annually? (b) How much at an interest rate of 12%? 3. Repeat requirement 2, assuming an interest rates of 6% and do the calculation twice, assun ing (a) annual and then (b) semiannual compounding. 9.49 Exercises in Compound Interest Study Appendix 9. Then answer the following questions: 1. It is your sixtieth birthday. You plan to work 5 more years before retiring. Then you want to spend $20,000 for a Mediterranean cruise. What lump sum do you have to invest now to accu- > OBJE mulate the $20,000? Assume your minimum desired rate of return is as follows: a. 5%, compounded annually b. 10%, compounded annually c. 20%, compounded annually 2. You want to spend $5,000 on a vacation at the end of each of the next 5 years. What lump sum do you have to invest now to take the five vacations? Assume that your minimum desired rate of return is as follows: a. 5%, compounded annually b. 10%, compounded annually c. 20%, compounded annually