Question: Please show work if applicable. 1 Future value: Chuck Tomkovick is planning to invest $25,000 today in a mutual fund that will provide a return
Please show work if applicable.
| 1 | Future value: Chuck Tomkovick is planning to invest $25,000 today in a mutual fund that will provide a return of 8 percent each year. What will be the value of the investment in ten years? | |||||||
| 2 | Present value: Tracy Chapman is saving to buy a house in five years. She plans to put 20 percent down at that time, and she believes that she will need $35,000 for the down payment. If Tracy can invest in a fund that pays 9.25 percent annually, how much will she need to invest today? | |||||||
| 3 | Interest rate: You are in a desperate need of cash and turn to your uncle, who has offered to lend you some money. You decide to borrow $1,300 and agree to pay back $1,500 in two years. Alternatively, you could borrow from your bank that is charging 6.5 percent interest annually. Should you go with your uncle or the bank? | |||||||
| 4 | Number of periods: You invest $150 in a mutual fund today that pays 9 percent interest annually. How long will it take to double your money? | |||||||
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