1. Irving just hit the jackpot in Las Vegas and won $35,000! If he invests it now at a 10% interest rate, how much will it be worth in fifteen years?
2. Trent would like to have $3,500,000 saved by the time he retires in 30 years. How much does he need to invest now at a 14% interest rate to fund his retirement goal?
3. Assume that Ramona accumulates savings of $1.5 million by the time she retires. If she invests this savings at 12%, how much money will she be able to withdraw at the end of each year for twenty years?
4. Jessica plans to invest $4,000 at the end of each year for the next seven years. Assuming a 10% interest rate, what will her investment be worth seven years from now?
5. Assuming a 6% interest rate, how much would Katie have to invest now to be able to withdraw $13,000 at the end of each year for the next nine years?
6. Victor is considering a capital investment that costs $510,000 and will provide the following net cash inflows:
Year Net Cash Inflow
1....................................................................................................... $304,000
2....................................................................................................... $206,000
3....................................................................................................... $108,000
Using a hurdle rate of 12%, find the NPV of the investment.
7. What is the IRR of the capital investment described in Question 6?