Exam 1 review - Saved to this PC Review View Help Search References Mailings A Aa A.D.A. E AaBbcc AaBbCcDc AaBbc AaBbccl Aab 1 Normal 1 No Spac... Heading 1 Heading 2 Title E . . Styles Paragraph 8. You can buy a piece of equipment with a new technology in 5 years, when the technology will be completed, for $50,000. You can earn 5% per year. How much should you deposit today in order to buy the equipment in 5 years? 9. You buy a house for $200,000 and want to sell it for $350,000 in 10 years. What appreciation rate must you obtain to do so? 10. You come out of college and take a job paying $40,000. Assuming you get raises of 3% a year, how long will it take before your salary reaches $152,000 a year? 11. You can invest $10,000 in Bank 1 at a rate of 8.5% for 7 years. You can also invest in Bank 2 at a rate of 7%. How much must you invest in Bank 2 to have the same amount at the end of 7 years? 12. You just won a prize of $240,000 to be paid $2,000 a month for 10 years. If you can earn 7% a year, what is the prize worth to you now? What is the effective interest rate? 13. The Cowboys just signed a new rookie to a 5 year contract with a 10M signing bonus and S292,000 to be paid per month. Assume an 8% discount rate. What is his contract worth? 14. You want to bid on a company that will generate $50,000 a year for the next 3 years. At the end of the third year the company will be liquidated, and all the assets will be sold for S150,000. Assume a discount rate of 6%. How much should you bid? 15. You want to retire in 40 years with IM in the bank. You can save $350/month at the end of