This exercise is designed to offer examples of time value problems that cannot be solved using the time value tables at the book of the book. Instead, they can be solved using Excel or a financial calculator. Compute the value for each of the following independent situations.
1. To save for their new child’s college education, a couple places $25,000 in an account. What amount will accumulate in the account at the end of 18 years, assuming an interest rate of 7.25% compounded annually?

2. An individual has just inherited a piece of land. The individual plans to hold the land for three years and then expects the land to sell for $200,000. What is the value today of inheriting the land, assuming an interest rate of 8.5% compounded annually?
3. To save money for the down payment on a house, an individual places $5,000 in an account at the end of each quarter. What amount will accumulate in the account at the end of four years, assuming an interest rate of 9.75% compounded quarterly?
4. To purchase a car, an individual agrees to pay $800 at the end of each month for the next six years. What is the cost of the car today, assuming an interest rate of 6.5%.
5. To help repay debt that will come due in 12 years, a company places $20,000 in an account at the beginning of each six-month period. What amount will accumulate in the account at the end of 12 years, assuming an interest rate of 4.5% compounded semiannually?
6. To rent office space, a company signs a lease agreeing to pay $2,500 at the beginning of each month for the next three years. What is the cost today of the lease, assuming an interest rate of 5% compounded monthly?