Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Provided are links to the present and future value tables: ( PV of $ 1 , FV of $ 1 , PVA of $ 1

Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1)
Note: Use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dollar.
a. How much would you have to deposit today if you wanted to have $64,000 in three years? Annual interest rate is 10%.
b. Assume that you are saving up for a trip around the world when you graduate in three years. If you can earn 6% on your
investments, how much would you have to deposit today to have $18,000 when you graduate?
Note: Round your answer to 2 decimal places.
c-1. Calculate the future value of an investment of $774 for ten years earning an interest of 9%.
Note: Round your answer to 2 decimal places.
c-2. Would you rather have $774 now or $1,800 ten years from now?
d. Assume that a college parking sticker today costs $92. If the cost of parking is increasing at the rate of 6% per year, how much will
the college parking sticker cost in seven years?
Note: Round your answer to 2 decimal places.
e. Assume that the average price of a new home is $132,500. If the cost of a new home is increasing at a rate of 7% per year, how
much will a new home cost in eight years?
Note: Round your answer to 2 decimal places.
f. An investment will pay you $13,000 in 9 years, and it also will pay you $360 at the end of each of the next 9 years (years 1 through
. If the annual interest rate is 5%, how much would you be willing to pay today for this type of investment?
Note: Round your intermediate calculations and final answer to the nearest whole dollar.
g. A college student is reported in the newspaper as having won $13,500,000 in the Kansas State Lottery. However, as is often the
custom with lotteries, she does not actually receive the entire $13.5 million now. Instead she will receive $675,000 at the end of the
year for each of the next 20 years. If the annual interest rate is 7%, what is the present value (today's amount) that she won? (ignore
taxes).
Note: Round your answer to nearest whole dollar.
Answer is complete but not entirely correct.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Tools for Business Decision Making

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

5th Edition

9781118560952, 1118560957, 978-0470239803

Students also viewed these Accounting questions