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(Related to Checkpoint 5.6) (Solving for i ) Kirk Van Houten, who has been married for 24 years, would like to buy his wife an expensive diamond ring with a platinum setting on their 30 -year wedding anniversary. Assume that the cost of the ring will be $13,000 in 6 years. Kirk currently has $4,441 to invest. What annual rate of return must Kirk earn on his investment to accumulate enough money to pay for the ring? The annual rate of return Kirk must earn on his investment to accumulate enough money to pay for the ring is %. (Round to two decimal places.) If you are offered $300,000 in 13 years and you can earn 11 percent on your money, what is the present value of $300,000? $ (Round to the nearest cent.) (Related to Checkpoint 5.5) (Solving for n ) Jack asked Jill to marry him, and she has accepted under one condition: Jack must buy her a new $300,000 Rolls-Royce Phantom. Jack currently has $43,240 that he may invest. He has found a mutual fund with an expected annual return of 5 percent in which he will place the money. How long will it take Jack to win Jill's hand in marriage? Ignore taxes and inflation. The number of years it will take for Jack to win Jill's hand in marriage is years. (Round to one decimal place.) (Related to Checkpoint 5.6) (Solving for i ) You are considering investing in a security that will pay you $4,000 in 27 years. a. If the appropriate discount rate is 8 percent, what is the present value of this investment? b. Assume these investments sell for $1,377 in return for which you receive $4,000 in 27 years. What is the rate of return investors earn on this investment if they buy it for $1,377 ? If you are offered $360,000 in 12 years and you can earn 12 percent on your money, what is the present value of $360,000 ? (Round to the nearest cent.) (Related to Checkpoint 5.6) (Solving for i ) You lend a friend $10,000, for which your friend will repay you $27,027 at the end of 5 years. What interest rate are you charging your "friend"? The interest rate you are charging your friend on the loan is %. (Round to the nearest whole percent.)

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