Question: Computing Future and Present Value Under Different Investment Assumptions 1. If we invest $30,000 in an account at 4% interest compounded annually, what is the
Computing Future and Present Value Under Different Investment Assumptions
| 1. If we invest $30,000 in an account at 4% interest compounded annually, | ||
what is the account balance at the end of five years? | ||
| 2. We wish to accumulate an investment fund of $120,000 at the end of six years | ||
by making a single deposit now. What amount must we deposit now assuming | ||
annual compounding of 6%? | ||
| 3. If we deposit $750,000 in an investment fund on January 1, which earns interest | ||
of 8% compounded annually, what annual payment can we withdraw each year over | ||
the next 20 years? Assume that our first withdrawal is at the end of the first year. | ||
| 4. If we make a payment of $1,725 each month starting today into a fund that earns 6%, | ||
how many months does it take to accumulate $100,000? Assume monthly | ||
compounding of interest. |
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