Question
You decide that you want to travel to the moon in 4 years. You figure you should start saving $35m per year, starting today. You
You decide that you want to travel to the moon in 4 years. You figure you should start saving $35m per year, starting today. You will make four deposits that pays 7.8% interest into your Bank of America account. Under these assumptions, how much will you have 4 years from today? (4.96)
b. You came in possession of a diamond mine. The mine will pay you $15,050 per year for 35 years, with the first payment being made today. If you think a fair return on the well is 7.75%, how much should you ask for it if you decide to sell it? (4.110)
c. Assume that you inherited an annuity that will pay you $12,225 each year for 10.5 years. You start earning money right away, but you need money today to start a new business. Your grandmother offers to give you $150,500 for the annuity. What rate of return would your grandmother earn on this sale? (4.124)
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