me someone wishes to have S50,000 ten years from now as a college education t a) How much money would have to be invested today at 6 percent compound b) How much money would have Assume a child interest? At 8 percent? to be invested annually at 6 percent compound interest? At 8 percent? 2. fand is currently worth $1.750 per acre and is expected to increase in value at a rate of 5 percent annually, what will it be worth in 5 years? In 10 years? In 20 years? 2. If you require a 7 percent rate of return, how much could you afford to pay for an acre of land now that has expected annual net cash revenues of $60 per acre for 10 years, and an expected selling price of $2,500 per acre at the end of 10 years? 3. 4. Assume you have only $20,000 to invest and must choose between the two investments below. Analyze each using FOUR methods discussed in class and an 8 percent opportunity cost of capital. Which investment would you select? Why? Investment A (S) Investment B (S) Initial Cost 20,000 20,000 Net Cash Revenues Year 1 Year 2 Year 3 6,000 6,000 6,000 6,000 6,000 0 5,000 5,000 5,000 5,000 5,000 8,000 Year 4 Year 5 Terminal Value