Odd Problems 1-5, 11, 13, 15, 17, 21, & 23 (p. 552-553) $4,800 $12,200 $8,500 3 years 2 years 1 year 8% 12% 12% Annually Quarterly Monthly 9. PACK MULES David Fontana Backpackers will need to buy some new pack mules in 5 years. These mules will cost a total of $10,000. What lump sum should the firm invest today at 7%, compounded annually, in order to be able to buy the mules? How much interest will be earned? 11. ECOTOUR The Daton's accountant told them they will get a refund of $8,500 on their income taxes. they are excited and decide to borrow as much as possible now to go on a lifelong dream tour of 1 month in the AMAZON in South America. They do not want to borrow more than can be repaid with their income tax refund. Find the proceeds if their accountant agrees to lend them the funds at 7% compounded monthly for 2 months. 13. SMALL GROCERY STORE Jose' Martinez, an immigrant from Mexico, estimates that he needs $9,000 to start a very small grocery store in 3 years. How much must he deposit today if his credit union will pay 4% compounded quarterly? 15. TIME VALUE OF MONEY Assume that money can be invested at 8% compounded semiannually. Which is larger, $2500 now or $3800 in 5 years? (hint: First find the present value of $3800; then compare present values). 17. FUTURE VALUE An investment of $30000 earns interest of 10% compounded semiannually for 2 years. Find the future value of the investment. If money can be deposited elsewhere for 2 years at 8% compounded quarterly, find the present value of this future value. 21. VALUING A HAIR SALON Jessie Jones believes her hair salon is worth $20,000 and estimates that its value will grow at 10% per compounded annually for the next 3 years. If she sells the business, the funds will be invested at 8% compounded quarterly. (a) find the future value if she holds onto the business. (b) what price should she insist on now if she sells the business? (pp. 557-558) 1. Find the compound amount and the interest earned for the following deposits. Round to the nearest cet. $12,400 at 6% compounded annually for 6 years 11. Find the interest earned by the following deposits. Assume 3 interest compound daily. Round to the nearest cent. Interest Amount Date Deposited Date Withdrawn $2900 March 4 May 30 17. Find the compound amount for each of the following certificates of deposit. Assume daily compounding. Round to the nearest cent. Compound Amount Deposited $4000 Interest Rate 5% Time In Years 3 21. Find the compound amount and the interest for the following deposits. Assume continuous compounding. Round to the nearest cent. Compound Amount Interest Amount $5000 Interest Rate 3% Time 5years 27. Find the present value for the following future amounts. Round to the nearest cent. Also find the interest earned. Amount Needed $14,300 Time 3 years Interest Rate 5 years Compounded Annually Present Value Interest Earned