Suppose you are committed to owning a $225,000 Ferrari.

Required:

If you believe your mutual fund can achieve a 8.50 percentannual rate of return, and you want to buy the car in 14 years onthe day you turn 35, how much must you invest today?(Enter rounded answer as directed, but donot use rounded numbers in intermediate calculations.Round your answer to 2 decimal places (e.g.,32.16).)

Amount to be invested

$

You have just made your first $10,000 contribution to yourindividual retirement account. Assume you earn a 7.5 percent rateof return and make no additional contributions.

Requirement 1:

What will your account be worth when you retire in 45 years?(Enter rounded answer as directed, but do not use roundednumbers in intermediate calculations. Round youranswer to 2 decimal places (e.g., 32.16).)

Amount

$

Requirement 2:

What if you wait 10 years before contributing? (Enterrounded answer as directed, but do not use rounded numbers inintermediate calculations. Round your answer to 2decimal places (e.g., 32.16).)

Amount

$

You expect to receive $20,000 at graduation in two years. Youplan on investing it at 10 percent until you have $100,000.

Required:

How long will you wait from now? (Enter rounded answeras directed, but do not use rounded numbers in intermediatecalculations. Round your answer to 2 decimalplaces (e.g., 32.16).)

Period

years

You have decided that you want to be a millionaire when youretire in 45 years.

Requirement 1:

If you can earn an annual return of 9 percent, how much do youhave to invest today? (Enter roundedanswer as directed, but do not use rounded numbers in intermediatecalculations. Round your answer to 2 decimalplaces (e.g., 32.16).)

Investment

$

Requirement 2:

What if you can earn 4.5 percent?(Enter rounded answer as directed, but donot use rounded numbers in intermediate calculations.Round your answer to 2 decimal places (e.g.,32.16).)

Investment

$

You have $25,000 you want to invest for the next 30 years. Youare offered an investment plan that will pay you 5 percent per yearfor the next 15 years and 8 percent per year for the last 15years.

Requirement 1:

How much will you have at the end of the 30 years?(Enter rounded answer as directed, but donot use rounded numbers in intermediate calculations.Round your answer to 2 decimal places (e.g.,32.16).)

Amount

$

Requirement 2:

If the investment plan pays you 8 percent per year for the first15 years and 5 percent per year for the next 15 years, how muchwill you have at the end of the 30 years?(Enter rounded answer as directed, but donot use rounded numbers in intermediate calculations.Round your answer to 2 decimal places (e.g.,32.16).)

Amount

$