You have an opportunity for an investment that will pay you the following the following:

Year 1

$175

$157.66

Year 2

$350

$284.07

Year 3

$545

$398.51

Year 4

$765

$503.92

Year 5

$980

$581.57

If you can earn 11% on a similar investment, what is the most you would pay for this investment?

Use the calculator to determine your answer.

NPV =

The following questions are related to Annuities. Please use the calulator to answer the questions.

You decide that you want to save money towards your retirement, so you open an IRA account and deposit $1,500

per year. If you are able to receive a 5.5% interest rate on the account, how much money will be in the account in 35 years?

Answer

You and your spouse are looking to save for a new house. You decide that you are going to put $15,000 in a bank account

yearly and that acoount will pay an interest rate of 7%. You will be making the first payment today. How much will you have in the

account at the end of 5 years?

Answer