for each question, each of the 4 steps must be done.
1. On the day Saffron was born, her parents put $36,000 into an investment account that promises to pay a fixed interest rate of 11 percent per year. How much money will she have in this account when she turns 18? Round to two decimal places. 2. At what rate must $400 be compounded annually for it to grow to $900.88 in 12 years? Submit your answer as a percentage and round to two decimal places. 3. How much money must be put into a bank account yielding 5.25% (compounded monthly) in order to have $6,800 at the end of 11 years? Round to two decimal places. 4. Yolanda deposited $8,000 in a bank account, and 9 years later she closes out the account, which is worth $16,000. What annual rate of interest has she earned over the time period? Submit your answer as a percentage and round to two decimal places. 5. Bridgette wants to retire 41 years from now. She decides to start saving $350 each month into a Roth IRA starting at the end of this month. If the IRA is expected to earn an average annual return of 13% compounded monthly, how much will she have in the account at the end of 41 years? Round to two decimal places. 6. Durran has recently acquired a rare art piece that he plans to put on display in his private collection. He estimates that revenues generated from donations and admissions tickets to see the new exhibit will be $23,000 per year for the next five years. If he requires a rate of return of 7%, how much are the expected cash flows worth for him today? Round to two decimal places. 7. Your uncle Adelai promises to pay you $16,000 in five years. You believe that you can earn a 6% rate of return on any investments made between now and then. How much is the amount worth to you today? Round to two decimal places. 8. Your company has received a $75,000 loan from an industrial finance company. The annual payments are $14,058.30. If the company is paying 10 percent interest per year, how many loan payments must the company make? Round to the nearest number of years. 9. You are ready to retire. A glance at your 401(k) statement indicates that you have $2,800,000. If the funds remain in an account earning 5% annually, how much could you withdraw at the end of each year for the next 25 years? Round to two decimal places. 10. If you wish to accumulate $380,000 in your child's college fund after 18 years and can invest at a 9% annual rate, how much must you invest at the end of each year if the first deposit is made at the end of the first year? Round to two decimal places. (ii) (i) Develop the timeline (linear representation of the timing of cash flows) Identify the time value of money variable (PV, FV, PMT, N or Rate) which needs to be calculated in the question. (iii) Identify the values of the remaining four variables (PV, FV, PMT, N or Rate) from the question. Be sure to input positive or negative signs. (iv) Calculate the correct value of the variable identified in step (ii)
