Question

Solve these various time value of money scenarios.
1. Suppose you invest a sum of $ 3,500 in an interest- bearing account at the rate of 10% per year. What will the investment be worth six years from now?
2. How much would you need to invest now to be able to withdraw $ 4,000 at the end of every year for the next 20 years? Assume an 8% interest rate.
3. Assume that you want to have $ 145,000 saved seven years from now. If you can invest your funds at a 6% interest rate, how much do you currently need to invest?
4. Your aunt Betty plans to give you $ 4,000 at the end of every year for the next 10 years. If you invest each of her yearly gifts at a 14% interest rate, how much will they be worth at the end of the 10- year period?
5. Suppose you would like to buy a small cabin in the mountains four years from now. You estimate that the property will cost $ 51,000 at that time. How much money would you need to invest each year in an interest- bearing account at the rate of 6% per year in order to accumulate the purchase price? Sustainability C
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  • CreatedAugust 27, 2014
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