Calculating present and future values

Use future or present value techniques to solve the following problems.

1. If you inherited $60,000 today and invested all of it in a security that paid a 6 percent rate of return, how much would you have in 20 years? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor.

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   Calculate your answer based on the financial calculator.

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2. If the average new home costs $225,000 today, how much will it cost in 8 years if the price increases by 3 percent each year? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor.

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   Calculate your answer based on the financial calculator.

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3. You forecast that in 7 years it will cost $246,000 to provide your child a 4-year college education. Will you have enough if you take $79,000 today and invest it for the next 7 years at 6 percent? Round the answer to the nearest cent. Round FV-factor and FVA-factors to three decimal places. -Select-YesNo , you will have approximately

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   -Select-moreless than your estimate of $246,000.
4. If you can earn 9 percent, how much will you have to save each year if you want to retire in 40 years with $1.8 million? Round the answer to the nearest cent. Round FVA-factor to three decimal places. Calculate your answer based on the FVA-factor.

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   Calculate your answer based on the financial calculator.

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