You plan to live very well when you retire in thirty-five years and have calculated that you will require $3,000,000 at that time.  If the rate of interest available is 9%, how much do you need to invest today in order to live comfortable during your retirement?  What if rates are only 4.5%?

 

2. You are buying a previously owned car today at a price of $4,950. You are paying $750 down in cash and financing the balance for 42 months at 8.45 percent. What is the amount of each loan payment? 

 

3. A widget machine can be purchase for $2,400 and will create cash flows of $600 per year for the first two years, $1,000 in year 3, and $200 in Year 4.  At the end of year 4 the machine can be sold for $400.  The market rate of interest is 8.5%. Should you buy the machine?.         

Answer rating: 100% (QA)

1 To calculate how much you need to invest today to have 3000000 in 35 years we can use the formula for compound interest Present Value PV Future Valu... View the full answer