Consider the following three independent scenarios.

a. To save for retirement, you invest $10,000 at the end of each year for 25 years. If your investment earns interest at an annual rate of 5%, how much will you have when you retire?

b. Lobner’s Candle Company signed a 20-year lease that requires annual payments of $7,000 at the beginning of each year. Assuming an annual interest rate of 6.5%, what is the present value of the lease payments?

c. Maxwell Enterprises would like to have $1,000,000 saved up in 10 years to fund equipment and building upgrades. If Maxwell invests $180,000 today and commits to depositing $50,000 at the end of each of the next 10 years, what annual interest rate must the fund earn to reach $1,000,000?

Instructions

Using functions in Excel or a financial calculator, solve for the unknowns in each of the scenarios.