Suppose that you inherit $100,000 and invest it until you retire 40 years from now, in a fund that averages 6.5% annual earnings, which you reinvest.

1. How much will you have at the end of 40 years?
2. Managers of investment funds usually charge a percentage each year of the amount invested. Suppose that the investment fund management charges you 0.25%, so you earn 6.25% instead of 6.5%. How much will you have at the end of 40 years?

If you have a 30 year $200,000 mortgage at 6.48% on a house or apartment, after 10 years of payments you will still owe about $170,000. What is the present value of $170,000, 10 years from now at an interest rate of 6.48%?

If you borrowed $15,000 to buy a new car at 4.9% interest per year, compounded annually, and paid back all the principal and interest at the end of 5 years, how much would you pay back?