Question 26
Answer each of the following....................
A. Assume that you have $7500 today to invest for 20 years. You can invest at 8% per year, compounded quarterly. How much will you have accumulated at the end of the 20 years?
B. Assume that you need to accumulate a total of $50,000 at the end of 32 years. You can invest at 4% per year, compounded semiannually. How much must you invest today in order to reach your $50,000 goal?
C. Assume that you have $7500 today and need a total of $12,000 at the end of 10 years. If you can invest today, you can earn interest compounded monthly. What annual interest must you earn? Be sure to state your final answer in annual terms.
D. Assume that you have $5000 today that you can invest at a rate of 8% per year, compounded semiannually. How many years will it take your money to triple? Be sure to state your answer in years.
E. Assume that you have the opportunity to invest in a regular (deferred) annuity of $500 paid semiannually. The annuity will run for 10 years. If your required rate of return is 6% per year, compounded semiannually, what is the present value of the annuity?