Time Value of Money - FINANCE

1) Jake graduated from college last month and wants to buy a condo within the next five years. He knows that he needs about $20,000 to cover the down payment and closing costs for the condo to keep his payments within an affordable range. He plans to earn six percent. How much must Jake invest today to have $20,000 five years from now?Round answer to the nearest dollar amount.

Answers to select from:

$14,940

$13,050

$16,116

$15,806

$16,342

2) Jake's parents were able to save $60,000 for his college tuition by the time Jake graduated from high school. Jake is trying to determine if he needs to work part time to make up any differences in his tuition over the next four years. He is currently estimating that tuition will be $18,000 per year, and he can earn eight percent on the balances remaining at the end of each year. How much will Jake be able to withdraw each year for his college tuition if he withdraws an equal amount each year for four years? Round to the nearest dollar amount.

Select answers from:

$15,000

$16,529

$18,000

$18,116

$19,342