Question: Chap 5: Time value of money 1.You want to go to grad school 3 years from now, and you can save $5,000 per year, beginning

Chap 5: Time value of money

1.You want to go to grad school 3 years from now, and you can save $5,000 per year, beginning one year from today. You plan to deposit the funds in a mutual fund which you expect to return 9% per year. Under these conditions, how much will you have just after you make the 3rd deposit, 3 years from now?

2. What is the interest rate that can help you earn $3,000 from $1,700 in two years, compounded semiannually?

3. You want to make sure that you have $9,000 after 3 years to pay off for a debt. Your salary allows you to save $200 each month, what type of interest you need to ensure that you have enough money?

4. You deposit $3,000 today in a saving with 13% compounded weekly. Find the total money do you have after 2 years.

5. How much is needed in an account that earns 8.4% compounded monthly in order to withdraw $1000 at the end of each month for 20 years?

6. What payment must be put in an account at the end of each quarter to establish an ordinary annuity that has a future value of $50,000 in 14 years, if the investment pays 12%, compounded quarterly? 7. You want to buy a new home costs $350,000, and you have $150,000 for a down payment. If you can finance this home with 12% compounded monthly for 10 years, what are your monthly home payments?

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