Thomas currently has $570,000 in his retirement account paying 5.7% compounded quarterly. He wants to have $1,500,000 when he retires in 15 years. How much must he deposit at the end of each quarter to meet his goal?

e.g. PV=XXX, FV=XXX, N(NPER)=XXX, I(Rate)=XXX, PMT=$$$.

2. The biggest jackpot in 1992 was $9.3 million won by a 60-year-old nurse in a Reno casino. The sum was to be paid in 20 annual installments of $465,000 each. She received the first installment on the day she won the jackpot. The interest rate at the time was about 8%. What was the present value of this jackpot?

3. Three years from now, Barbara Waters will purchase a laptop computer that will cost $2,250. Assume that Barbara can earn 6.25% (compounded monthly) on her money. How much should she set aside today for the purchase?

4. A commercial bank will loan you $10,500 for three years to buy a car. The loan must be repaid in equal monthly payments. The annual interest rate on the loan is 9% of the unpaid balance. What is the amount of the monthly payments?

After the 24^th payment, what will the balance be?

5. A friend of yours has offered to let you in on a limited partnership to open a new video arcade. He wants you to invest $50,000 now for a 10% partnership and he has projected the following cash flows for your returns. You have asked around and believe the appropriate discounting rate is 16%. What is the net present value of this opportunity?

	Cash flow
Year 1	0
Year 2	0
Year 3	$20,000
Year 4	$20,000
Year 5	$70,000	When he buys out your share

Two Step Problems

6. Oliver currently has $2,200 in a savings account paying 4.0% interest. He has a goal of taking a year-long around the world vacation. He has decided to deposit $150 from each paycheck (24 a year) for the next two years. Then he will leave on his vacation and withdraw an amount at the beginning of each month while he is on his cruise. How much will he be able to withdraw each month of his voyage?

7. I am planning to retire in 10 years. I want to have enough saved so that I can withdraw $2,000 per month each month beginning on the day I retire for the next 25 years. During my retirement account I will invest in a conservative account paying 8%. Between now and when I retire, I will make end of each quarter payments into an aggressive account that will earn 10% compounded annually. How much must I put away each month to meet my goal?