Answer each of the following independent questions. Ignore personal income taxes. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)

Required:

1. Suppose you invest $4,100 in an account bearing interest at the rate of 10 percent per year. What will be the future value of your investment in five years? (Round your answer to 2 decimal places.)

The future value of the investment

2. Your best friend won the state lottery and has offered to give you $11,600 in four years, after he has made his first million dollars. You figure that if you had the money today, you could invest it at 8 percent annual interest. What is the present value of your friends future gift? (Round your answer to 2 decimal places.)

The present value of the gift

3. In four years, you would like to buy a small cabin in the mountains. You estimate that the property will cost you $68,500 when you are ready to buy. How much money would you need to invest each year in an account bearing interest at the rate of 4 percent per year in order to accumulate the $68,500 purchase price? (Round your answer to 2 decimal places.)

Required investment per year

4. You have estimated that your educational expenses over the next four years will be $14,600 per year. How much money do you need in your account now in order to withdraw the required amount each year? Your account bears interest at 6 percent per year.(Round your answer to 2 decimal places.)

Amount required

Future Value and Present Value Tables able I uo$1.01 125 1.191 1 301 1.464 1.406 1.482 1.728 1.30 1.762 2488 1712 2.196 1.584 2 360 2 594 24/6 2.773 3106 1.423 5.160 1.79 2332 1.732 2 201 20 2181 200 6720 able II 1.00 Ch lows 1000 1000 100) 2.100 4779 7330 T 716 13 580 960 12 21 35 21015 23276 15 20024 271 31773 37 260 56790 1,10100 15026 154.782 057 507 767000 1,342000 7,34ag00 9058 1132 149 241.330 Table III PresentVelue of $1.00 .7317 540 "201 .305 .206 210 201 .170 157 ,S39 123 100 13 .001 A09290 229 .182 .s45 .116 093 ,001 000 040 027 Table IV 1.00 Cash Faws Period 4%6%8%10% 12% 14% 169% 14% 20% 22% 24% 2. 3 2T75 2573 2577 24E7 2A 2 2322 2245 2.174 2.100 2042 1.981 1 2 1rea 1.808 1.8 4 36) 34 6 12 170 3,037 2914 2730 2e90 2509 2494 2,404 2382 200 2201 2.166 3274 3 522 4917 43E5 4.11 ang 366 2496 3308 3167 3000 2961 2 2754 2643 6247 5 4.086 3 13 998 63 7.904 7.10 6A24 842 342 4.910 4533 4200 3012 3790 3666 2427 3220 9818 8S1 4) 19. 15.0 6 11 925 779 8244 7105 62a4 5546 4.997 4564 4168 3999 3.ses a571 3.333