Question 1

One year ago, Deltona Motor Parts deposited $16,500 in an investment account for the purpose of buying new equipment three years from today. Today, it is adding another $12,000 to this account. The company plans on making a final deposit of $20,000 to the account one year from today. How much will be available when it is ready to buy the equipment, assuming the account pays 5.5 interest annually compounded?

Question 2

Arlene loaned her brother-in-law $1500 five years ago. Last night, after winning big at Bingo, he paid her back $2000 on the spot. What annual interest rate did she earn on her money?

Question 3

You are celebrating the birth of your daughter. Assume you will need $250,000 in 18 years to pay for her college education. How much would you need to deposit today to have $250,000 in 18 years, if you invest the money at 8% per year?

Question 4

Jill just inherited $100,000. She wants to invest the money today and retire when her nest egg reaches $1,000,000, without any additional funds. If she invests the money in CDs with a return of 7% per year, how many years will she have to continue working? How long will she expect to work if she invests instead in the stock market, with a historical return of 12.6%? All rates are annually compounded.

Question 5

Blake has decided that he will retire as soon as he accumulates $3,000,000. He will invest $1000 each month starting one month from today. His investments earn 12% APR, compounded monthly. How long will it be before he retires?

Question 6

If the annual interest rate is 5%, would you rather receive $100 now or $1000 50 years from now? At what interest rate, will you be indifferent?

Question 7

An electronics store is offering