Problem 3 5 points Solve the following problem using the table(s). Please round

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Problem 3 5 points Solve the following problem using the table(s). Please round intermediate calculations to 4 decimal places as done in class. After all the time value of money discussions in your Principles of Finance class, you decided to experiment with the magic of compound interest. After all, if Einstein thought it is the 8th Wonder of the World, why should you doubt him. Beginning today, you will be investing $5,000 per year for the next 40 years in an account earning 8%. How much will you have 40 years later? Problem # 4 5 points Given the following information: 1-year T-bond 3-year T-bond 5-year T-bond 10-year T-bond 5.37 5.65 5.64 5.75 A bond trader can either buy a 10-year bond or invest in a 5-year bond and then reinvest the proceeds. What is the 5-year rate 5 years from now? Problem # 5 10 points Use THE APPROPRIATE FORMULA to solve the following. Elizabeth has $35,000 in an investment account. Her goal is to have the account grow to $100,000 at a rate of 15.0% without having to make any additional contributions to the account. How long will she need to hold the account in order to meet her goal considering that interest is being compounded monthly? Write the appropriate formula and show your work on the worksheet provided. You are NOT PERMITT ED TO USE THE TVM SCREEN ON YOUR CALCULATOR. Show all your workto Show every single calculation.

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1 This question requires knowledge of GP (as you are not allowed to use calculator) Future value = 5000 x (1.08) + 5000 x (1.08)^2 +…….+5000 x (1.08)^40 Common 5000 GP will be 1.08+1.08^2+1.08^3+……..+1.08^40 here, a=1.08 r (common ratio) = 1.08 Sum of n terms of a GP = Putting values = 1.08[(1.08^40 - 1)/(1.08 - 1)] 279.781 Multiply by 5000 we get = 5000 x 279.781 = 1398905 279.781 is the annuity value of 40 years

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