# Case 1 - Round all dollar amounts to the nearest dollar YOU...

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Round all dollar amounts to the nearest dollar. YOU MUST USE THE TABLES! EXAMPLE: Bill has decided to start a savings account for his son’s college education by depositing \$2,000 at the end of every year for the next 15 years. A bank has agreed to pay 6% interest compounded semiannually. How much will Bill have in the bank for his son’s education? Solve for the future value of an annuity. Future value (FV) = Present value (PV) = Payment (P) = Number of periods (n) = Interest rate (i) = Factor from table = 1. Bill Burke invests 10,000 today at 8% annual interest and leaves the money invested without withdrawing any of the interest for 3 years. How much interest will Bill earn? ______________ At the end of 3 years Bill can withdraw ______________. 2. Bill invests \$10,000 today in a fund that earns 8% interest compounded annually, at the end of 3 years Bill can withdraw _____________. Future value (FV) = Present value (PV) = Payment (P) = Number of periods (n) = Interest rate (i) = Factor from table = 3. Bill invests \$10,000 today in a fund that earns 8% interest compounded semiannually. The investment would grow to what amount in 3 years? ________________ Future value (FV) = Present value (PV) = Payment (P) = Number of periods (n) = Interest rate (i) = Factor from table = 4. Steve needs \$20,000 in 4 years. What amount must he invest today if his investment earns 12% compounded annually? ____________________ Future value (FV) = Present value (PV) = Payment (P) = Shelby Sparks ACCT-2020

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Number of periods (n) = Interest rate (i) = Factor from table = 5. Peter needs \$20,000 in 4 years. What amount must he invest today if his investment earns 12% compounded quarterly? _______________________ Future value (FV) = Present value (PV) = Payment (P) = Number of periods (n) = Interest rate (i) = Factor from table = 6. William needs \$200,000 in 10 years. How much must he invest at the end of each year, at 9% interest, to meet his needs? _______________________ Future value (FV) = Present value (PV) = Payment (P) = Number of periods (n) = Interest rate (i) = Factor from table = 7. Janet will invest \$30,000 today. She needs \$222,000 in 21 years. What annual interest rate must she earn? __________________________ (Interest compounded.) Future value (FV) = Present value (PV) = Payment (P) = Number of periods (n) = Interest rate (i) = Factor = Shelby Sparks ACCT-2020
8. Dan will invest \$10,000 today in a fund that earns 5% annual interest. How many years will it take for the fund to grow to \$13,400? _____________ (Interest compounded.) Future value (FV) = Present value (PV) = Payment (P) = Number of periods (n) = Interest rate (i) = Factor = 9. Connie will deposit \$20,000 in a 12% fund at the end of each year for 8 years. What amount will be in the fund immediately after the last deposit? _________________________ Future value (FV) = Present value (PV) = Payment (P) = Number of periods (n) = Interest rate (i) = Factor from table = 10. Plan for your retirement by assuming that you can earn 10% interest compounded annually. You will start

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Case 1 - Round all dollar amounts to the nearest dollar YOU...

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