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My Sites My Library IT Support Useful Links Mahara TIME VALUE OF MONEY Time Value of Money (20 marks) Required: (a) You are hoping to buy a house in the future and recently received an inheritance of $500,000. If you put your inheritance in an account that earns 7% interest compounded annually, how much will it be worth at the end of 10 years? (5 Marks) (b) (c) If you invest $250,000 at 12% interest compounded quarterly, how much money you will have in your investment at the end of 3 years? Upon graduating from university 20 years ago, Dr Nick Riviera was already planning his retirement. Since then, he has made $10,000 deposits into a superannuation fund annually. Nick has just completed his final payment and is finally ready to retire. His superannuation fund has earned 9% interest per year compounded annually. (Ignore tax.) How much has Nick accumulated in his superannuation fund? (5 marks) (5 marks) fo (d) Sarah Wiggum would like to make a single investment and have $2 million at the time of her retirement in 20 years. She has found a managed fund that will earn 8% annually. How much will Sarah have to invest today? (5 marks) Answer by typing in the box below or copying and pasting from word/Excel file or attaching the answer to this question in word/Excel file. My Sites My Library IT Support Useful Links Mahara TIME VALUE OF MONEY Time Value of Money (20 marks) Required: (a) You are hoping to buy a house in the future and recently received an inheritance of $500,000. If you put your inheritance in an account that earns 7% interest compounded annually, how much will it be worth at the end of 10 years? (5 Marks) (b) (c) If you invest $250,000 at 12% interest compounded quarterly, how much money you will have in your investment at the end of 3 years? Upon graduating from university 20 years ago, Dr Nick Riviera was already planning his retirement. Since then, he has made $10,000 deposits into a superannuation fund annually. Nick has just completed his final payment and is finally ready to retire. His superannuation fund has earned 9% interest per year compounded annually. (Ignore tax.) How much has Nick accumulated in his superannuation fund? (5 marks) (5 marks) fo (d) Sarah Wiggum would like to make a single investment and have $2 million at the time of her retirement in 20 years. She has found a managed fund that will earn 8% annually. How much will Sarah have to invest today? (5 marks) Answer by typing in the box below or copying and pasting from word/Excel file or attaching the answer to this question in word/Excel file.
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