On the next 10questions, express monetary answers to the nearest whole dollar andpercentages to the
nearest hundredth. Round months to the nearest tenth on Question20.
For example, $1,234,567 (don’t include the cents) is appropriatefor a monetary answer. For percentages, an
appropriate example is 12.34%. Do not round 12.34% to 12.3% or12%

15. Charles wants toretire in 20 years and he has $124,650 in his retirement accounttoday. His retirement
account compounds quarterly. His Uncle Stan and Aunt Claudia haveestablished a trust fund for him that will
pay $165,000 to him in 15 years. Stan and Claudia have locked in aninterest rate of 7.84 percent,
compounded quarterly, that will continue after Charles receives the$165,000. He wants the sum of the trust
and his retirement account to equal $975,000 upon retirement in 20years. What annual rate will Charles need
to earn on the retirement account to achieve this goal?

16. Compute the combined present value of $6,000 paid in five yearsand $4,500 paid in seven years using the
following discount rates: 6.25 percent in years 1 and 2, 5.85percent in years 3 and 4, 4.82 percent in years 5
and 6 and 4.36 percent in year 7.

17. What annual rate of return is earned on a $39,450 investmentthat grows to $72,864 in eight years if the
account is compounded quarterly?