Question
QUESTION 1 a. If you deposit $90,000 in a bank account that pays 8% interest annually, how much will be in your account after 7
QUESTION 1
a. If you deposit $90,000 in a bank account that pays 8% interest annually, how much will be in your account after 7 years? Show your calculations. Round to two decimal places.
b. What is the present value of a security that will pay $50,000 in 20 years if securities of equal risk pay 9% annually? Show your calculations. Round to two decimal places.
QUESTION 2
Roberts parents currently have $300,000 saved and they plan to retire in 20 years. Based on their anticipated retirement lifestyle, they estimate they will need $2,000,000 at retirement.
a. If they dont save any additional funds, what annual rate of return do they need to earn to reach their goal? Show your calculations. Round to two decimal places.
b. If they save an additional $40,000 a year, what annual rate of return do they need to earn to reach their goal? Show your calculations. Round to two decimal places.
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