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57 Multiple compounding periods: Find the future value of a five-year $100,000 investment that t and that has the following compounding periods: a. Quarterly b. Monthly c. Daily d. Continuous 58 Growth rates: Joe Mauer, a catcher for the Minnesota Twins, is expected to hit 15 home runs in 5.9 Present value: Roy Gross is considering an investment that pays 7.6 percent, compounded 5.10 Present value: Maria Addai has been offered a future payment of $750 two years from now. If 2014. Ifhis home-run-hitting ability is expected to grow by 12 percent every year for the following five years, how many home runs is he expected to hit in 2019? annually. How much will he have to invest today so that the investment will be worth $25,000 in six years? she can earn 6.5 percent, compounded annually, on her investment, what should she pay for this investment today? Present value: Your brother has asked you for a loan and has promised to pay you $7,750 at the end of three years. If you normally invest to earn 6 percent per year, how much will you be willing to lend to your brother if you view this purely as a financial transaction (i.e., you don't give your brother a special deal)? 5.11 5.12 Present value: Tracy Chapman is saving to buy a house in five years. She plans to put 20 percent down at that time, and she believes that she will need $35,000 for the down payment. If Tracy can invest in a fund that pays 9.25 percent annually, how much will she have to invest today? 5.13 Present value: You want to buy some bonds that will have a value of $1,000 at the end of seven years. The bonds pay 4.5 percent interest annually. How much should you pay for them today? 5.14 Present value: Elizabeth Sweeney wants to accumulate $12,000 by the end of 12 years. If the annual interest rate is 7 percent, how much will she have to invest today to achieve her goal? 5.15 Interest rate: You are in desperate need of cash and turn to your uncle, who has offered to lend you some money. You decide to borrow $1,300 and agree to pay back $1,500 in two years. Alterna- tively, you could borrow from your bank that is charging 6.5 percent interest annually. Should you borrow from your uncle or the bank? 5.16 Number of periods: You invest $150 in a mutual fund today that pays 9 percent interest annu- ally, How long will it take to double your money