Problem 10 (5 marks) In July 2023 , the average Canadian house price was $668,754. In July 1983 the average house price was just $75,300. What is the annual percentage increase in the price of a home for this period? Problem 11 (4 marks) The average cost of a loaf of bread today is $3.00. What was the price of a loaf of bread in 1990 if the annual percentage increase in the price of bread was 4.29% over this period? Problem 12 (6 marks) Gabe and Gabriella are visiting from Brazil. They have fallen in love with Nova Scotia and want to purchase a cottage on the South Shore when they retire in 5 years' time. They have $40,000 available today to invest. Gabe wants to invest the funds in an investment expected to earn 5% compounded annually over the next 5 years. Gabriella wants to invest in a riskier investment which is expected to earn 9% compounded annually over the next 5 years. How much more would they have to invest today in the less risky investment to achieve the same value as they would earn by holding the riskier investment in 5 years' time? Problem 13 (9 marks) You have been saving for a vacation property and currently have $15,000 towards a down payment. With increasing real estate prices, you feel you will need $20,000 for the down payment. a) If you put your savings in an account that earns 6% interest, compounded annually, how many years will it take before your savings grows to $20,000 ? ( 2 marks) b) How long will it take your money to grow to $20,000 if you earn only 4% compounded annually? ( 2 marks) c) What does this tell you about the relationship between: I. interest rates \& time? (1 mark) II. time \& future values? (1 mark) III. interest rates \& future values? ( 1 mark) Problem 14 (4 marks) Luka wants to travel throughout Europe when he graduates from SMU in 4 years' time. He estimates the total cost of the trip to be $10,000. a) How much will Luka need to invest today to have $10,000 in four years? Assume he can earn the following interest rates over the next four years: ( 2 marks) Eirst year: 4%, Second year 6%. Third year: 8%, and Fourth year: 10% b) Instead of investing the money today, Luka has decided to wait two years to invest the money. How much will he need to invest, two years from today, to have $10,000 four years from today? (2 marks) First year: 4%, Second year 6%, Third year: 8%, and Fourth year: 10%