Question

please answer all of the following questions

14. Assume that I will deposit $750 into an account exactly 10 years from today. How much will be in my account at the end of year 60 (i., 60 years from today), assuming that my account pays interest of 4.5% p.a.? 15. What is the future value at the end of year 15 of $10,000 deposited today into an account that pays interest of 4.5% p.a., but with daily compounding (assume 365 days per year)? 16. Walt is evaluating an investment that will provide the following returns at the end of each of the following years: year 1, $12,500: year 2, $10,000; year 3, $7,500; year 4, $5,000; year 5, $2,500; year 6, S0; and year 7, $12,500. Walt believes that he should earn an annual rate of 8 percent on this investment. How much should he pay for this investment? 17. Assume that Delilah Copperspoon started a paper route on January I, 1970. Since that day, at the end of every three (3) months (first deposit made on April 1, 1970), she deposited $500.00 into a savings account, which paid her interest of 4 percent annually but with quarterly compounding. On January 1, 1980, she took the balance in her savings account and transferred it to an account that paid I1.5 % p.a. Assuming that Delilah did not deposit any additional money into the account after the transfer, how much did she have in her account on January 1, 2017?

Answer 1

14.

Future Value = 750(1.045)⁵⁰

Future Value = $6,774.48

15.

Future Value = 10,000(1 + 0.045/365)^(15*365)

Future Value = $19,639.50

16.

Present Value = 12,500/(1.08) + 10,000/(1.08)² + 7,500/(1.08)³ + 5,000/(1.08)⁴ + 2,500/(1.08)⁵ + 12,500/(1.08)⁷

Present Value = $38,771.44