Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

When you retire 40 years from now, you want to have $1.2 million. You think you can earn an average of 12 percent on your

When you retire 40 years from now, you want to have $1.2 million. You think you can earn an average of 12 percent on your investments. To meet your goal, you are trying to decide whether to deposit a lump sum today, or to wait and deposit a lump sum 2 years from today. How much more will you have to deposit as a lump sum if you wait for 2 years before making the deposit?

7. One year ago, you invested $1,800. Today it is worth $1,924.62. What rate of interest did you earn?

8. Ten years ago, Jackson Supply set aside $130,000 in case of a financial emergency. Today, that account has increased in value to $330,592. What rate of interest is the firm earning on this money?

9. Some time ago, Julie purchased eleven acres of land costing $36,900. Today, that land is valued at $214,800. How long has she owned this land if the price of the land has been increasing at 6 percent per year?

10. You're trying to save to buy a new $160,000 Ferrari. You have $58,000 today that can be invested at your bank. The bank pays 6 percent annual interest on its accounts. How many years will it be before you have enough to buy the car? Assume the price of the car remains constant.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Econometrics

Authors: Peijie Wang

1st Edition

0415426693, 978-0415426695

More Books

Students also viewed these Finance questions

Question

600 lb 20 0.5 ft 30 30 5 ft

Answered: 1 week ago

Question

3. How has e-commerce transformed marketing?

Answered: 1 week ago