5. Doris is retiring today and she plans to buy a new car for $25,000 seven years from now and a second new car for $40,000 seventeen years from now. How much "new car money" should she set aside now if she can expect to earn 8% compounded annually on her savings? Round to the nearest dollar.
6. Today is Almo's 20th birthday and he has just received a large amount of money to sign a contract with a professional hockey team. He wants to put away enough money to make sure that on his 50th birthday he will have $2,500,000. For the next ten years he is confident that his investments will earn 15% compounded annually and after that, 10% compounded annually. To the nearest dollar, how much must he invest today?
7. Andy borrowed money four years ago at 13.2% compounded monthly. He now owes a total of $13,743. To the nearest dollar, how much of this is interest?
8. In order to pay off a debt that he took out today, Roger will have to make a payment of $3,500 in 15 months and $5,500 in 36 months. The interest rate is 8% compounded quarterly. What is the total amount of interest that is included in these payments?
9. Two payments of $7,500 each must be made three years and six years from now. If money can earn 8.4% compounded monthly, what single payment, four years from now, would be equivalent to the two scheduled payments? Round to the nearest dollar.
10. Two payments of $850 and $600 must be made two years and five years from now respectively. If money can earn 4% compounded semiannually, what single payment, three years from now, would be equivalent to the two scheduled payments? 11. Kramer borrowed $6,000 from George at an interest rate of COC 11
1. What amount was invested 35 years ago at 7% compounded semiannually if the value of the investment has now grown to $1,000,000 ? Round to the nearest dollar. 2. Murphy's annual income has increased by 10% per year for the last 8 years. If Murphy's annual income is now $72,596, what was it 8 years ago? Round to the nearest dollar. 3. Money is worth 5% compounded semiannually. What is the value today of a contract that will bring in a payment of $86,500 in nine years? Round to the nearest dollar. 4. Eighteen years from now I will need to have $120,000 to pay for my child's post-secondary education. I anticipate being able to earn 14% compounded annually for the first 10 years and 11% compounded annually for years #11 through #20. To the nearest dollar, what amount of money should I invest today in order to meet my goal? 5 . Doris is retiring today and she plans to buy a new car for $25,000 seven years from now and a second new car for $40,000 seventeen years from now. How much "new car money" should she set aside now if she can expect to earn 81/2% compounded annually on her savings? Round to the nearest dollar. 6. Today is Almo's 20th birthday and he has just received a large amount of money to sign a contract with a professional hockey team. He wants to put away enough money to make sure that on his 50th birthday he will have $2,500,000. For the next ten years he is confident that his investments will earn 15% compounded annually and after that, 10% compounded annually. To the nearest dollar, how much must he invest today? 7. Andy borrowed money four years ago at 13.2% compounded monthly. He now owes a total of $13,743. To the nearest dollar, how much of this is interest? 8. In order to pay off a debt that he took out today, Roger will have to make a payment of $3,500 in 15 months and $5,500 in 36 months. The interest rate is 8% compounded quarterly. What is the total amount of interest that is included in these payments? 9. Two payments of $7,500 each must be made three years and six years from now. If money can earn 8.4% compounded monthly, what single payment, four years from now, would be equivalent to the two scheduled payments? Round to the nearest dollar
