Your father has agreed to sell you his business when you turn 35 years old. The business is currently worth $100,000, but your Dad says it will increase in value by 5% per year and the sales price will include the appreciation. You have just turned 22 and have $10,000 in a bank account which pays 7% annual interest, compounded monthly.

1) What kind of analysis is a part of figuring this out?

2) If the value of the business appreciates 5% annually, as your Dad expects, what will you have to pay him for the business when you are 35 years old?

3) What is the relevant rate and nper for determining how much you will have when your Dad expects to sell you the business?