Earlier Question :

Lisa and David have been married for two years. They have just decided that summer of 2020 should be spent in Switzerland. They figured out that in order to meet the cost of the entire vacation they would only have to dedicate what they already have in their saving account now ($ 5,859.37) for that vacation, keeping their regular monthly saving during the next two years for different purposes. Given that the annual compound interest rate is 8.5%, how much would they be able to spend for their vacation?

Now, Let's assume that the couple would delay taking that vacation until summer 2022, where the cost would increase to $10,000, and let's also assume that their friend Kim has just made an offer to deliver $10,000 to the couple upon their arrival at Geneva Airport on the first of June, 2022. Kim's offer is a proposal of an alternative payment of a personal loan of $7,500 that she got from the couple in 2015. The agreement then was that the loan had to be paid back by Summer of 2022 with a compound interest rate of 5% annually.

7. If the couple draws a new plan of saving for that vacation by putting aside $200 at the end of each month for the next three years, and if the cost of vacation stays the same as ($9,384.44), and the interest rate is 11% compounded annually, would the couple be able to take that vacation in 2019?

8. What must their annuity be in order to make it to their vacation in 2021 if the interest rate is 15% compounded semiannually.

9. What must their annuity be in order to make it to their vacation in 2021 if the interest rate is 13.75% compounded quarterly.

10.What must their annuity be in order to make it to their vacation in 2021 if the interest rate is 11.5% compounded monthly.

11. What must their annuity be in order to make it to their vacation in 2021 if the interest rate is 8.25% compounded weekly.

12. Calculate the present value of the couple's stream of returns to their five assets using a compound interest rate of 9.5%.

Asset # Return Year

1 $ 1,115 2018

2 $ 1,320 2019

3 $ 2,900 2020

4 $ 4,356 2020

5 $ 5,213 2023