1. You need $3,000 in six years. You now have $1,200. What rate of return will you have to earn to have your desired amount of money?

2. How long would it take to double the $6,000 you have in your savings account if you continue to earn the whopping three percent the bank is currently paying?

3. Cyber College is offering the following tuition arrangement. They told Mr. Saylor that if he gave them $10,000 now, that when his son reaches college age, the college will cover all his first-year expenses. They estimate his son's first-year college expenses will be $15,000. Mr. Saylor's son is eight years old and will begin college at age 18 (in ten years). What is the implied rate of return?

4. Mr. Ulee invested the vast majority of his wealth ($500,000) in a honeybee farm. Today (20 years later), his financial broker estimates that his wealth to be close to $1 million. What is the implied rate of return? Do you think Mr. Ulee did well in his honeybee investment?

5. Your brother and sister-in-law have $3,500 saved up to put towards a down payment on their first house. They are considering two investment alternatives and want to know how long each alternative will take to quadruple their money. The first investment is Treasury securities that pay seven and a half percent and is a sound investment backed by the full faith and credit of the federal government. The second investment is a bit riskier. However, their friend, Buddy, said that they would earn a minimum of 25 percent annually. All they have to do is invest in his Linger Longer Lounge that he plans to open up in downtown Kirksville later this year. They've asked you how long it will take them to quadruple their money under each scenario and which one you would recommend and why.

6. Your broker offers to sell you a partnership in an oil and gas syndicate. The investment required is $10,000. Also, there is an additional $1,000 fee to be inducted into the partnership. At the end of five years, the syndicate will pay you $12,000. What rate of return will you earn, and would you go along with your broker's recommendation?

7. Challenge Problem: You need to have $17,000 in one year to pay off a gambling debt or large men with bats, and bent noses will be after you. You now have $400. What will the annual rate of return have to be, for you have to have the cash you need?