5-1 FUTURE VALUE how much will be in your account after 5 years? If you deposit $10,000 in a bank account that pays 10% interest annually. 5-2 What is the present value of a security that will pay $5,000 in 20 years if PRESENT VALUE securities of equal risk pay 7%annually? 5-3 FINDING THE REQUIRED INTEREST RATE Your parents will retire in 18 years. They currently have $250,000 saved, and they think they will need $1,000,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? 5-4 If you deposit money today in an account that pays TIME FOR A LUMP SUM TO DOUBLE 65% annual interest, how, long will it take to double your money? 5-5 You have $42,180.53 in a brokerage account, and you TIME TO REACH A FINANCIAL GOAL plan to deposit an additional $5,000 at the end of every future year until your account totals $250,000. You expect to earn 12% annually on the account. How many years will it take to reach your goal? 5-6 What's the future value of a 7%, 5-year FUTURE VALUE: ANNUITY VERSUS ANNUITY DUE ordinary annuity that pays $300 each year? If this was an annuity due, what would its future value be? PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, An investment will pay $100 5-7 and $500 at the end of Year 6, If other investments of equal risk earn 8% annually, what is its present value? Its future value? You want to buy a car, and a local bank will lend you LOAN AMORTIZATION AND EAR $20,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 12% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR? 5-8