Time Value of Money Worksheet Q 4-6

AutoSave OFF W TVM Worksheet - Saved to my Mac Home Insert Draw Design Layout References Mailings Review View Tell me Share 0 Comments X Calibri (Bo... 11 Af Aa A EEL AaBbCcDdEe AaBbCD AaBbCcDdE AaBb AaBb CcDd Ee V Aa Bb CcDdEe AaBbCcDdEe Normal Paste BIUab x, x? ADA Title No Spacing Heading 1 Heading 2 Subtitle Subtle Emph... V V Dictate Styles Pane 4. You can afford to invest $200/month currently. You are saving for a $3,000 mountain bike. If you can earn 6% annually (compounded monthly) on your investments, how long (in years) will it take to earn the $3,000? Solve for N and adjust interest rate to monthly rate. Answer will be in months so convert to years. 5. If you buy an ounce of gold today for $1,625, hold it for two years, then sell it for $1,800, what return have you earned on this investment? Solve for I/Y. 6. For your college graduation, your parents want to give you the ultimate gift: cash! They offer you two options. You can either have $2,000 at graduation this month or $750 per year for the next three years. Currently investments are paying around 7%. Which option should you choose? Solve for PV of $750 annual payment. Compare to graduation amount to see which is best. Page 2 of 2 434 words * English (United States) Focus + 114%