Future value of a single cash flow

1.- How much money will you receive after 5 years if you put $40,000 in a savings account, with interest 10% per year ?

Present value of a single cash flow

2.- Demi Moore is offered $1 million for selling the copyrights of her life. However, she is convinced that her popularity will grow even further and that she can expect to receive $2 million in 5 years from now. With an annual interest rate of 14%:

1. what is the present value of the $2 million in 5 years from now?
2. should she sell the rights now or wait ?

3.- A 15 year old boy wants to be a millionair when he is 50 years old. How much money should he put in the bank now, if the annual interest rate is 8% ? What should he put in if the interest rate is 12% annual ?

The concept of equivalence

4.- For which annual interest rate is $1,000 1 year ago the same as $2,500 in 6 years from now ?

5.- For which annual interest rate is $1,500 now the same as $2,200 in 4 years from now ?

Future value of independent cash flows

6.- The Old-Students-from-Tec Club is 65 years old now. They plan to celebrate the 75^th anniversary really big: the party is calculated to cost $25 million. To raise money they will raise money in this years reunion and in the reunion five years from now. The expectation is that this year they will get $4 million, in 5 years they will get $8 million. If there is not enough money raised, the members will pay the rest at the time of the party (in 10 years from now). The money will be put in a bank account immediately, for an interest rate of 13% per year.

Is there enough money for the party, or should the members pay additional money to reach the $25 million ? If so: how much ?