CV 12A.1 Chapter 12A Canvas Homework: Time Value of Money 1) Alvin wants to buy his daughter a car when she graduates from college in four years. He plans to put aside $1,500 a quarter and can invest it at 12%. How much will he have to spend on the car in four years? Instead of putting money aside each quarter, Alvin decides he will make one investment today at 12%. How much must he invest if he wants to buy a $35,000 car for her graduation in four years? 2) Theodore won the lottery) He has the option of either taking receive $1,500,000 every year for 20 years. a) Theodore can invest his funds at 9%, which option should he choose? b) If he could only invest his funds at 3%, how would his decision change? the lump sum of $20,000,000 today or 3) Theodore decided to take the lump sum winnings. He invested $15,000,000 of the winnings into a fund earning 9%. How much will this investment be worth in five years? Simon plans to retire in 30 years and wants to have $2,000,000 at that time. He can invest at 8%. How much must Simon invest each year in order to reach his retirement goal? 5) Simon has retired with $2,000,000. If he can continue to invest at 8%, how much can he withdraw from his retirement fund each year for the next 20 years? 6)