Question

Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dollar.) a. How much would you have to deposit today if you wanted to have $54,000 in five years? Annual interest rate is 8%. b. Assume that you are saving up for a trip around the world when you graduate in two years. If you can earn 7% on your investments, how much would you have to deposit today to have $14,500 when you graduate? (Round your answer to 2 decimal places.) c-1. Calculate the future value of an investment of $643 for eight years earning an interest of 12%. (Round your answer to 2 decimal places.) c-2. Would you rather have $643 now or $1,000 eight years from now? d. Assume that a college parking sticker today costs $78. If the cost of parking is increasing at the rate of 4% per year, how much will the college parking sticker cost in nine years? (Round your answer to 2 decimal places.) e. Assume that the average price of a new home is $122,000. If the cost of a new home is increasing at a rate of 9% per year, how much will a new home cost in nine years? (Round your answer to 2 decimal places.) f. An investment will pay you $9,500 in 10 years, and it will also pay you $290 at the end of each of the next 10 years (years 1 thru 10). If the annual interest rate is 6%, how much would you be willing to pay today for this type of investment? (Round your intermediate calculations and final answer to the nearest whole dollar.) g. A college student is reported in the newspaper as having won $10,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $10 million now. Instead she will receive $500,000 at the end of the year for each of the next 20 years. If the annual interest rate is 5%, what is the present value (today’s amount’) that she won? (ignore taxes). (Round your answer to nearest whole dollar.)

Answer 1

$ 54,000.00 Future Value Interest Rate Tenure 8% 5 years Present value factor @8% for 5th year Present value 0.6805832 Future Value * Present Value Factor $ 36,751 Present value You need to deposit $ 36751 to get $ 54000 after 5 years Future Value $ 14,500.00 Interest Rate 7% Tenure 2 years Present value factor @ 7% at the end of 0.873438728 2th year Future Value * Present value Present Value Factor Present value $ 12,664.86 You need to deposit $12664.86 to get $ 14500 after 2 years

c-1 Present Value Interest Rate Tenure FV of $1 after 8 years at 12% $ 643.00 12% 8 years 2.475963176 Present Value * Future Value of $1 after years @ 12% Future value 8 years Future Value of Investment $ 1,592.04 C-2 As future value of $643 at 12% interest rate, is $1592.04 and which is more than the $ 1000, we would have $ 643 now. Present Value Increasing Rate Tenure FV of $1 after 9 years at 4% $ 78.00 4% 9 years 1.423311812 Present Value * Future Value of $1 after 9years Future value 8 years @4% Parking Sticker Cost after 9 years $ 111.02

Please ask the remaining requirements by posting it as another question.