Provided are links to the present and future value tables Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the bottom of this worksheet). Required: a. How much would you have to deposit today if you wanted to have $60,000 in four years? Annual interest rate Years Futures $60,000 Interest rate 9% 4 Present value Wears b. Assume that you are saving up for a trip around the world when you graduate in two years. If you can earn 8% Interest rate on your investments how much would you have to deposit today to have $15,000 when you graduate? 8% Future 5 $15,000 Present value 6 Present value Years Investment $463 Interest rate 9% 1. Calculate the future value of an investment of $463 for 10 years earning an interest of 9% 10 Future value 22. Would you rather have $463 now or $1,000 ten years from now? 5 4 Would you rather have $463 now or $1,000 ten years from now? d. Assume that a college parking sticker today costs $90. If the cost of parking is increasing at the 7 rate of 5% per year, how much will the college parking sticker cost in eight years? Years Currents $90 Interest rate 5% 8 Future value 1. Assume that the average price of a new home is $158.500. If the cost of a new home.is Canto inter Vane Assume that the average price of a new home is $158,500, of the cost of a new home is Increasing at a rate of 10% per year, how much will a new home cost in eight years? Currents interest rate $158,500 10% 8 Future value Y An investment will pay you $10,000 in 10 years, and it also will pay you $400 at the end of each of the next 10 years years 1 through 10). If the annual interest rate is 6%, how much would you be willing to pay today for this type of investment? Futures $10,000 Ants $400 Interest to 696 10 Presentatie A college student is reported in the newspaper as having won $10,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $10 million now. Instead she will receive 500,000 at the end of the year for each of the next 20 years. it the annual interest rate is 6%, what is the present value today's amount that she won? (Ignore years Interest rate Annual S500.000 20 B. A college student is reported in the newspaper as having won $10,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $10 million now, instead she will receive $500,000 at the end of the year for each of the next 20 years. If the annual interest rate is 6%, what is the present value (today's amount) that she won? (Ignore taxes.) Years Annual $500,000 Interest rate 6% 20 Present value
