Question

**5-1**

**FUTURE VALUE** If you deposit $10,000 in a bank
account that pays 10% interest annually, how much will be in your
account after 5 years?

**5-2**

**PRESENT VALUE** What is the present value of a
security that will pay $5,000 in 20 years if securities of equal
risk pay 7% annually?

**5-3**

**FINDING THE REQUIRED INTEREST RATE** Your parents
will retire in 18 years. They currently have $250,000, and they
think they will need $1,000,000 at retirement. What annual interest
rate must they earn to reach their goal, assuming they don’t save
any additional funds?

**5-4**

**TIME FOR A LUMP SUM TO DOUBLE** If you deposit
money today in an account that pays 6.5% annual interest, how long
will it take to double your money?

**5-5**

**TIME TO REACH A FINANCIAL GOAL ** You
have $42,180.53 in a brokerage account, and you plan to deposit an
additional $5,000 at the end of every future year until your
account totals $250,000. You expect to earn 12% annually on the
account. How many years will it take to reach your goal?

**5-6**

**FUTURE VALUE: ANNUITY VERSUS ANNUITY DUE** What’s
the future value of a 7%, 5-year ordinary annuity that pays $300
each year? If this was an annuity due, what would its fu- ture
value be?

**5-14**

Answer #1

Solution:

5-1

We need to calculate the future value of $10,000 deposit at 10% after 5 years.

Future Value = Deposit Amount x (1 + Rate of
Interest)^{Number of times interest payable}

Rate of Interest = 10% or 0.10

Number of times interest payable = 5

Future Value = $10,000 (1 + 0.10)^{5}

= 10,000 x 1.61051

**= $16,105.10**

5-2

Present Value = Future Value x 1/(1+Rate of Interest)^{Number
of Years}

= $5,000 x 1 / (1+0.07)^{20}

= $5,000 x 0.25842

**= $1,292.10**

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Pls ask separate question for remaining parts.

1. You have $10,455.45 in a brokerage account, and you plan to
deposit an additional $4,000 at the end of every future year until
your account totals $250,000. You expect to earn 14% annually on
the account. How many years will it take to reach your goal? Round
your answer to two decimal places at the end of the
calculations.
2. a. What's the future value of a 9%, 5-year ordinary annuity
that pays $800 each year? Round your answer...

You have $54,773.07 in a brokerage account, and you plan to
deposit an additional $6,000 at the end of every future year until
your account totals $290,000. You expect to earn 11% annually on
the account. How many years will it take to reach your goal? Round
your answer to two decimal places at the end of the
calculations.
A. What's the future value of a 3%, 5-year ordinary annuity that
pays $700 each year? Round your answer to the...

1. Your parents will retire in 27 years. They currently have
$320,000 saved, and they think they will need $1,150,000 at
retirement. What annual interest rate must they earn to reach their
goal, assuming they don't save any additional funds? Round your
answer to two decimal places.
2. If you deposit money today in an account that pays 14% annual
interest, how long will it take to double your money? Round your
answer to two decimal places.
3. You have...

You have $36,431.01 in a brokerage account, and you plan to
deposit an additional $5,000 at the end of every future year until
your account totals $230,000. You expect to earn 12% annually on
the account. How many years will it take to reach your goal?

You have $32,506.07 in a brokerage account, and you plan to
deposit an additional $6,000 at the end of every future year until
your account totals $250,000. You expect to earn 11% annually on
the account. How many years will it take to reach your goal? Round
your answer to the nearest whole number. years

Time to reach a financial goal
You have $16,296.74 in a brokerage account, and you plan to
deposit an additional $5,000 at the end of every future year until
your account totals $250,000. You expect to earn 11% annually on
the account. How many years will it take to reach your goal? Round
your answer to two decimal places at the end of the
calculations.
years

You have $33,749.85 in a brokerage account, and you plan to
deposit an additional $4,000 at the end of every future year until
your account totals $250,000. You expect to earn 10.2% annually on
the account. How many years will it take to reach your goal? Round
your answer to the nearest whole number.

TIME TO REACH A FINANCIAL GOAL You have
$65,767.89 in a brokerage account, and you plan to deposit an
additional $5,000 at the end of every future year until your
account totals $250,000. You expect to earn 11% annually on the
account. How many years will it take to reach your
goal? Round UP to the nearest year. (Example 5.01 years
= 6 years) Your answer should include numerical value
only.

You have $23,474.12 in a brokerage account, and you plan to
deposit an additional $5,000 at the end of every future year until
your account totals $230,000. You expect to earn 13% annually on
the account. How many years will it take to reach your goal? Round
your answer to the nearest whole number.
years

You have $26,261.67 in a brokerage account, and you plan to
deposit an additional $3,000 at the end of every future year until
your account totals $250,000. You expect to earn 13% annually on
the account. How many years will it take to reach your goal? Round
your answer to two decimal places at the end of the
calculations.

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 58 seconds ago

asked 22 minutes ago

asked 22 minutes ago

asked 25 minutes ago

asked 25 minutes ago

asked 41 minutes ago

asked 55 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago