Question

1. How many years will it take for ​$500 to grow to ​$1,021.27 if​ it's invested at 7 percent compounded​ annually?

2. Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of ​$390,000 due in 25 years. In other​ words, they will need ​$390,000 in 25 years. Toni​ Flanders, the​ company's CEO, is scrambling to discount the liability to the present to assist in valuing the​ firm's stock. If the appropriate discount rate is 7 ​percent, what is the present value of the​ liability?

3. Lance Murdock purchased a wooden statue of a Conquistador for $ 7,000 to put in his home office 8 years ago. Lance has recently​ married, and his home office is being converted into a sewing room. His new​ wife, who has far better taste than​ Lance, thinks the Conquistador is hideous and must go immediately. Lance decided to sell it on​ e-Bay and only received ​$4,900 for​ it, and so he took a loss on the investment. What was his rate of​ return, that​ is, the value of i​?

What was Lance​ Murdock's rate of​ return, that​ is, the value of i​? Enter a negative percentage for a loss.

_​% ​ (Round to two decimal​ places.)

Answer 1

1

Future value = present value*(1+ rate)^time

1021.27 = 500*(1+0.07)^Time

Time(in years) = 10.56

2

Future value = present value*(1+ rate)^time

390000 = Present value*(1+0.07)^25

Present value = 71857.179

Please ask remaining parts separately, questions are unrelated. I have done one bonus