QUESTION 1

PART A

PART B

PART C

PART D

PART E

(Related to Checkpoint 5.5) (Solving for n) How many years will it take for $500 to grow to $1,039.50 if it's invested at 5 percent compounded annually? The number of years it will take for $500 to grow to $1,039.50 at 5 percent compounded annually is years. (Round to one decimal place.) (Related to Checkpoint 5.6) (Solving for I) At what annual interest rate, compounded annually, would $510 have to be invested for it to grow to $1,923.82 in 12 years? The annual interest rate, compounded annually, at which $510 must be invested for it to grow to $1,923.82 in 12 years is %. (Round to two decimal places.) (Related to Checkpoint 5.4) (Present value) What is the present value of $800 to be received 13 years from now discounted back to the present at 10 percent? The present value of $800 to be received 13 years from now discounted back to the present at 10 percent is (Round to the nearest cent.) (Related to Checkpoint 5.6) (Solving for i) Kirk Van Houten, who has been married for 21 years, would like to buy his wife an expensive diamond ring with a platinum setting on their 30-year wedding anniversary. Assume that the cost of the ring will be $11,500 in 9 years. Kirk currently has $4,423 to invest. What annual rate of return must Kirk eam on his investment to accumulate enough money to pay for the ring? The annual rate of return Kirk must earn on his investment accumulate enough money to pay for the ring is %. (Round to two decimal places.) (Related to Checkpoint 5.6) (Solving for I) You are considering investing in a security that will pay you $4,000 in 30 years. a. If the appropriate discount rate is 12 percent, what is the present value of this investment? b. Assume these investments sell for $723 in return for which you receive $4,000 in 30 years. What is the rate of return investors earn on this investment if they buy it for $723? a. If the appropriate discount rate is 12 percent, the present value of this investment is s (Round to the nearest cent.)