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Question;6-1;FUTURE VALUE;If;you deposit $10,000 in a bank account that pays 10 percent interest annually;HOW;MUCH MONEY WILL BE IN YOUR ACCOUNT AFTER 5 YEARS?;6-2;PRESENT VALUE;Assume;that you can earn 7 percent if you were to invest in other securities of;equal risk.;WHAT;IS THE PRESENT VALUE OF A SECURITY THAT PROMISES TO PAY YOU $5,000 IN 20;YEARS?;6-3;TIME FOR A LUMP SUM TO;DOUBLE;6-5;EFFECTIVE RATE OF INTEREST;Your;parents are planning to retire in 18 years.;They currently have $250,000, and they would like to have $1,000,000;when they retire.;WHAT;ANNUAL RATE OF INTEREST WOULD THEY HAVE TO EARN ON THEIR $250,000 IN ORDER TO;REACH THEIR GOAL, ASSUMING THEY SAVE NO MORE MONEY?;If;you deposit money today into an account that pays 6.5 percent interest;HOW;LONG WILL IT TAKE FOR YOU TO DOUBLE YOUR MONEY?;6-4;REACHING A FINANCIAL GOAL;John;Roberts has $42,180.53 in a brokerage account, and he plans to contribute an;additional $5,000 to the account at the end of every year. The brokerage account has an expected;annual return of 12 percent.;IF;JOHN?S GOAL IS TO ACCUMULATE $250,000 IN THE ACCOUNT, HOW MANY YEARS WILL IT;TAKE FOR JOHN TO REACH HIS GOAL?


Paper#51193 | Written in 18-Jul-2015

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