Question $1$

Answer the following questions as thoroughly as possible and if necessary provide some examples.

$1\mathrm{.}1$ Which are the three rules of time travel in the finance literature?

$(5\%)$

$1\mathrm{.}2$ How much time will be needed for a quantity to double given that the growth rate is $10\%?$

$(10\%)$

$1\mathrm{.}3$ Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's college education. Currently, college tuition books, fees, and other costs, average $$12,500$ per year. On average, tuition and others costs have historically increased at a rate of $4\%$ per year.

Assuming that college costs continue to increase an average of $4\%$ per year and that all her college savings are invested in an account paying $7\%$ interest, how much will be the amount of money she will need to have available at age $18$ to pay for all four years of her undergraduate education? $($Hint: in order to solve this question you need to think about the amount that is needed to be paid in the first year of college and then proceed with further calculations$)$

$(18\frac{1}{3}\%$

TOTAL $3313\%$