Activity 1.4.docx

# Activity 1.4.docx - Answer the following questions 1...

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Answer the following questions: 1. Calculating the future value of property. Ben Collins plans to buy a house for \$220,000. If that real estate is expected to increase in value by 3 percent each year, what will its approximate value be seven year from now? \$270,572.25 2. Using the Rule of 72. Using the rule of 72, approximate the following amounts: 1. If the value of land in an area is increasing 6 percent a year, how long will it take for property values to double? 12 years 2. If you earn 10 percent on your investments, how long will it take for your money to double? 7.2 years 3. At an annual interest rate of 5 percent, how long will it take for your savings to double? 14.4 years 3. Determining the inflation rate. In 2006, selected automobiles had an average cost of \$16,000. The average cost of those same automobiles is now \$28,000. What was the rate of increase for these automobiles between the two time periods? 75 Percent 4. Computing the Time Value of Money. Using time value f money tables, calculate the following: 1. The future value of \$450 six years from now at 7 percent.
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• Summer '13
• N/A

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