Use the attached present and future value tables to answer the following questions: a) Tom needs to have $20,000 in his investment account in 7 years. If his account earns 6% interest per year, how much must he deposit today in order to have $20,000 7 years from now? b) If, instead, Tom deposits $2,000 each year in the account for the next 7 years, how much will he have in the account at the end of 7 years? c) Tom wants to buy a vehicle for the business. The sticker price is $28,000. The dealer is offering him an annual payment plan of $5,873.72 per year for 6 years if he wants to finance the vehicle. What annual interest rate is the dealer charging? d) Tom pays $2,400 per year for rent on the first of January each year. He wants to deposit an amount in his 6% investment today that will allow him to draw $2,400 each year for the next 5 years. How much will he need to deposit today in order to draw $2,400 per year for 5 years?

Use the attached present and future value tables to answer the following questions: a) Tom needs to have $20,000 in his investment account in 7 years. If his1 account earns 6% interest per year, how much must he deposit today in order to have $20,000 7 years from now? b) If, instead, Tom deposits $2,000 each year in the account for the next 7 years, how much will he have in the account at the end of 7 years? c) Tom wants to buy a vehicle for the business. The sticker price is $28,000. The dealer is offering him an annual payment plan of $5,873.72 per year for 6 years if he wants to finance the vehicle. What annual interest rate is the dealer charging? d) Tom pays $2,400 per year for rent on the first of January each year. He wants to deposit an amount in his 6% investment today that will allow him to draw $2,400 each year for the next 5 years. How much will he need to deposit today in order to draw $2,400 per year for 5 years?

PRESENT VALUE TABLE Present Value of a Lump Sum Payment (Compound Interest) \begin{tabular}{|l|c|c|c|c|c|c|c|c|c|c|} \hline & \multicolumn{8}{|c|}{ Interest rates (r)} \\ \hline & 1% & 2% & 3% & 4% & 5% & 6% & 7% & 8% & 9% & 10% \\ \hline 1 & 0.990 & 0.980 & 0.971 & 0.962 & 0.952 & 0.943 & 0.935 & 0.926 & 0.917 & 0.909 \\ \hline 2 & 0.980 & 0.961 & 0.943 & 0.925 & 0.907 & 0.890 & 0.873 & 0.857 & 0.842 & 0.826 \\ \hline 3 & 0.971 & 0.942 & 0.915 & 0.889 & 0.864 & 0.840 & 0.816 & 0.794 & 0.772 & 0.751 \\ \hline 4 & 0.961 & 0.924 & 0.888 & 0.855 & 0.823 & 0.792 & 0.763 & 0.735 & 0.708 & 0.683 \\ \hline 5 & 0.951 & 0.906 & 0.863 & 0.822 & 0.784 & 0.747 & 0.713 & 0.681 & 0.650 & 0.621 \\ \hline 6 & 0.942 & 0.888 & 0.837 & 0.790 & 0.746 & 0705 & 0.666 & 0.630 & 0.596 & 0.564 \\ \hline 7 & 0.933 & 0.871 & 0.813 & 0.760 & 0.711 & 0.665 & 0.623 & 0.583 & 0.547 & 0.513 \\ \hline 8 & 0.923 & 0.853 & 0.789 & 0.731 & 0.677 & 0.627 & 0.582 & 0.540 & 0.502 & 0.467 \\ \hline 9 & 0.914 & 0.837 & 0.766 & 0.703 & 0.645 & 0.592 & 0.544 & 0.500 & 0.460 & 0.424 \\ \hline 10 & 0.905 & 0.820 & 0.744 & 0.676 & 0.614 & 0.558 & 0.508 & 0.463 & 0.422 & 0.386 \\ \hline 11 & 0.896 & 0.804 & 0.722 & 0.650 & 0.585 & 0.527 & 0.475 & 0.429 & 0.388 & 0.350 \\ \hline 12 & 0.887 & 0.788 & 0.701 & 0.625 & 0.557 & 0.497 & 0.444 & 0.397 & 0.356 & 0.319 \\ \hline 13 & 0.879 & 0.773 & 0.681 & 0.601 & 0.530 & 0.469 & 0.415 & 0.368 & 0.326 & 0.290 \\ \hline 14 & 0.870 & 0.758 & 0.661 & 0.577 & 0.505 & 0.442 & 0.388 & 0.340 & 0.299 & 0.263 \\ \hline 15 & 0.861 & 0.743 & 0.642 & 0.555 & 0.481 & 0.417 & 0.362 & 0.315 & 0.275 & 0.239 \\ \hline 16 & 0.853 & 0.728 & 0.623 & 0.534 & 0.458 & 0.394 & 0.339 & 0.292 & 0.252 & 0.218 \\ \hline 17 & 0.844 & 0.714 & 0.605 & 0.513 & 0.436 & 0.371 & 0.317 & 0.270 & 0.231 & 0.198 \\ \hline 18 & 0.836 & 0.700 & 0.587 & 0.494 & 0.416 & 0.350 & 0.296 & 0.250 & 0.212 & 0.180 \\ \hline 19 & 0.828 & 0.686 & 0.570 & 0.475 & 0.396 & 0.331 & 0.277 & 0.232 & 0.194 & 0.164 \\ \hline 20 & 0.820 & 0.673 & 0.554 & 0.456 & 0.377 & 0.312 & 0.258 & 0.215 & 0.178 & 0.149 \\ \hline \end{tabular} Present Value of a Periodic Payment (Annuity)