Solve problem 3.25

ing the old family farm. Alvin wants to start college and have $12,000 available to buy ased car when he graduates in 4 years. Alvin wants to buy a new com- puter, software, and peripherals now, and he earns 3% in his savings account. How much can he spend on the computer now and stil have enough to grow to the 312,000 he needs when he graduates? Contributed by Paul R. McCright, University of South Florida (b) Use the iaterest tables and interpolation. (c) Use a TVM calculator. Contributed by Paul K. McCright, University of South Florida 3-24 Ace Manufacturing is building a new facility that will cost $44M. Ace wil boTTOW $40M from Fist National Bank and pay the remainder immediately as a down payment. Ace will pay 7% interest but will make no payments for 4 years, at which time the entire amount wil be due. How large wili Ace's paymeat be? Contributed by Paul R. McCright, University of South Florida Suppose that S2000 is deposited in an account that earns 6% interest. How much is in the accont 3-18 (a) after 5 years? (b) after 10 years? (c) after 20 years? (d) after 50 years? 3-25) How much must you invest now at 7.9% interest to -' accumulate $175,000 in 63 years? 3-26 (a) If $100 at Tirhe "O" will be worth S110 a year (e) after 100 years? 3-19 An inheritance will be $20,000. The interest rate for later and was $90 a year ago, compute the inter- est rate for the past year and the interest rate next the time value of money is 7%. How much is the inheritance worth now, if it wi be received (a) in 5 years? (b) in 10 years? (c) in 20 years? (d) in 50 years? year. (b) Assume that S90 invested a year ago will retunn $110 a yearfrom now. What is the annual interest rate in this situation? 327 In 1995 an anonymoas ptivate collector purchased a painting by Picaasoentitled AngelFernandezde Soto for $29.152,000. The picture depicts Picasso's friend de Soto seated in a Barcelona cafe drinking absinthe. The painng was done in 1903 and was valued then at $600. If the painting was owned by the same fam- ly until its sale in 1995, what rate of retum did tey 3-20 Rita borrows $5000 from her parents. She repays them $6000. What is the interest rate if she pays the $6000 at the cnd of (a) Year 2? (b) Ycar 37 (c) Year 5? (d) Year l0? receive on the $600 investment? 3-28 The followingserics of payments will repay a present sum of $5000 at an 8% interest rate. Use single payment factors to find the present sum that is equiv alent to this series of payments at a 10% interest rate. End-of-Year Year Payment $1400 1320 1240 1160 1080 3-37