Your 15 year old niece earned $9,000 this summer by cutting grass. Because she lives with her parents, she decided to save all of her earnings.If she invested all $9,000 in an account that earns 9.75% interest per year and makes no other deposits to this account, how much will the account be worth 50 years from now (when she is at the traditional retirement age)?

1.b. Your 15 year old nephew is able to save $350 per month. If he invests $350 per month in an account that earns 9.75% interest (per year!), how much will he have in the account 50 years from now (when he is at the traditional retirement age)?

2.You are considering the investment project summarized by the cash flows and timeline below.If the discount rate is 5%, what is the net present value of this project?Would you accept or reject the project?

Year 0: cash outflow (cost) of $2,500

Year 1: cash inflow of $1,000

Year 2: cash inflow of $1,050

Year 3: cash inflow of $1,100

Year 4: cash inflow of $900

Answer rating: 100% (QA)

1a 15yearold nieces savings Formula for future value with no additional depositsFV Principal 1 Inter... View the full answer