Questions 1-5

Clicker Question Preparation Guide: App. G and Ch. 10 Clicker questions will be asked in class based on your completion of this preparation guide. You will not have time to complete this guide in class! 1) Janis Company signed a lease for a rental unit for 16 years. Under the lease agreement, a deposit of $10,000 is made. The deposit will be returned at the expiration of the lease with interest compounded at 6% per year. What amount will Jones Company receive at the time the lease expires? 2) Ross Gellar has an investment that pays him $23,000 every year for the next 10 years. However, he would like to sell his investment today to purchase a house. Assume the going market interest rate is 8%, how much would a wise investor be willing to pay for this investment? 3) Rachael Green wants to save up for a car which she will need when she graduates in 4 years. How much would she have to deposit today, if this amount would earn 11% per year, to have $50,000 when she graduates? 4) Joey and Phoebe decided to invest $3,000 every year for their daughter's college fund until she is 18 (starting on her 1st birthday and including her 18th birthday). How much will be in the savings account on her 18h birthday (after the last deposit) assuming an intere rate of 7%