a. How much would you have to deposit today if you wanted $60,000 iin three year
ID: 2543150 • Letter: A
Question
a. How much would you have to deposit today if you wanted $60,000 iin three years. Annual interest rate is 10%.
present value=
b. Assume that you are saving up for a trip around the world when you graduate in 2 years. if you can earn 6% on your investment. How much would you have to deposit today if you want 16,500 when you graduate?
present value=
c. calculate the future value of an investment of $715 for nine years earning and interest of 10%.
future value=
c2- would you rather have 715 now or 1800 nine years from now
Qutz ow much would you have to deposit today you wanted to have $60,0 0inthree years? Annual interest rate is K % PV f EY of PVAost and Eats use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dolla.) b Assume that you are sangupforarp around the world when you gadu re n two years ryou can earn 6% on our mestm how much would you have to deposit today to have St6500 when you graduate? Round your answer to 2 decimei places) c-1. Calculate the future value of an investment of $715 places.) for nine years earning an interest of 10% (Round your answer to 2 decimal ninde c-2. Would you rather have $715 now or s1,800 nine years from now? O Nine years from no O Now d. Assume that a college parking sicker today costs $86 Ir the cost of perking is incressing ot the ote the college pasing socker cost in seven years? (Round your answer to 2 decimal c pleces) eeM:@ here to searchExplanation / Answer
Solution a:
Future value = $60,000
Annual interest = 10%
Period = 3 years
Let amount to be deposited today = P
Future Value = P (1+r)^t = P (1.10)^3 = $60,000
P = $60,000 / (1.10)^3 = $45,079
Hence amount to be deposited today $45,079 in order to have $60,000 in 3 years.
Solution b:
Future value = $16,500
Annual interest = 6%
Period = 2 years
Let amount to be deposited today = P
Future Value = P (1+r)^t = P (1.06)^2 = $16,500
P = $16,500 / (1.06)^2 = $14,684.94
Hence amount to be deposited today $14,684.94 in order to have $16,500 in 2 years.
Solution c 1:
Future value = P * (1+r)^t
= $715 (1+0.10)^9
= $1,685.93
Solution c2:
As future value of $715 in 9 years is lower than $1,800, i would like to hae $1,800 nine years from now.
Solution d:
College parking sticker cost today = $85
College parking sticker cost after 7 years = $85 (1 + 0.06)^7 = $127.81
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