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2. Using the Rule of 72. Using the rule of 72, approximate the following amounts. (Obj. 3) a. If the value of land in an area is increasing 6 percent a year, how long will it take for property values to double? b. If you earn 10 percent on your investments, how long will it take for your money to double? c. At an annual interest rate of 5 percent, how long will it take for your savings to double? 3. Determining the Inflation Rate. In 2000, selected automobiles had an average cost of $16,000. The average cost of those same auto- 4. Computing Future Living Expenses. A family spends $36,000 a year for living expenses. If prices increase by 2 percent a year 5. Calculating Earnings on Savings. What would be the yearly earnings for a person with $8,000 in savings at an annual interest 6. Computing the Time Value of Money. Using time value of money tables, calculate the following. (Obj. 4) mobiles is now $28,000. What was the rate of increase for these automobiles between the two time periods? (Obj. 3) for the next three years, what amount will the family need for their living expenses after three years? (Obj. 3) rate of 2.5 percent? (Obj. 4) a The future value of $450 six years from now at 7 percent. b. The future value of $800 saved each year for 10 years at 8 percent. c. The amount a person would have to deposit today (present value) at a 6 percent interest rate to have $1,000 five years from now. d. The amount a person would have to deposit today to be able to take out $500 a year for 10 years from an account earning 8 percent. 7. Calculating the Future Value of a Series of Amounts. Elaine Romberg prepares her own income tax return each year. A tax preparer would charge her $80 for this service. Over a period of 10 years, how much does Elaine gain from preparing her own tax return? Assume she can earn 3 percent on her savings. (Obj. 4)

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