W A X C Che e ts of Corporate Solved Calculating Future Value x My Drive Google Drive * 333 week 40- Google Docs creader chegg.com /books/9781260394719/cf/6/441/4/10/16/24/18/290.0 14. Calculating Rates of Return In 2018, an Action Comics No. 1, featuring the first appearance of Superman, was sold at auction for $573,600. The comic book was originally sold in 1938 for $.10. What was the annual increase in the value of this comic book? 15. Calculating Rates of Return Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2010, Deutscher-Menzies sold Arke under the Shower, a painting by renowned Australian painter Brett Whiteley, at auction for a price of $1,100,000. Unfortunately for the previous owner, he had purchased it 3 years earlier at a price of $1,680,000. What was his annual rate of return on this painting? mediate (Questions 16-25) 16. Calculating Rates of Return Refer back to the Series FE savings bonds we discussed at the very beginning of the chapter. ssuming you purchased a $50 face value bond, what rate of return would you earn if you held the bond for 20 years until it doubled in value? you purchased a $50 face value bond in early 2018 at the then-current interest rate of 10 percent per year, how much would the bond be worth in 2028? 2028, instead of cashing the bond in for its then-current value, you decide to hold the bond until it doubles in face value in 2038. What rate of return will you earn ver the last 10 years? 17. Calculating Present Values Suppose you are still committed to owning a $175.000 Ferrari (see Question 9). If you believe your mutual fund can achieve an annual return of 11.2 percent, and you want to buy the car in 10 years on the day you turn 30, how much must you invest today? 18. Calculating Future Values You have just made your first $5.000 contribution to your individual retirement account. Assuming you earn an annual rate of return of 10.2 percent and make no additional contributions, what will your account be worth when you retire in 45 years? What if you wait 10 years before contributing? (Does this suggest an investment strategy?) 2 19. G re are scheduled to receive $10,000 in 2 years. When you receive it, you will investit for six more years at 7-6 percent per year. How much will you have in eight iods You expect to receive $30,000 af graduation in two years. You plan on investing it at 7 percent until you have $125.000. How long will you wait from n Question 9, but still no Ferrari.) have $5.800 to deposit Regency Bank offers 12 percent per your compounded monthly 1 percent per month, while King Bankolens 12 percent but will only will your investment be worth in 20 years at each bank? 03 22. Copy An investment offers to triple your money in 24 months (don't believe it). What rate per three months are you being offered? 4 23. lods You can eam 31 percent per month at your bank. If you deposit $1,500, how long must you wait until your account has grown to $3.100 2 24. Read Aloud from here ou need $85.000 in 10 years. If you can earn 78 percent per month, how much will you have to deposit today? 2 25. Calculating Present Values You have decided that you want to be a millionaire when you retire in 45 years. If you can earn an annual return of 11.4 percent, how much do you have to me today? What if you can earn 5-7 percent? Challenge (Question 26) DAL
