This preview shows pages 1–2. Sign up to view the full content.

TVM 1. What is the future value of \$1,000 invested today if you earn 7% annual interest for 5  years? FV = 1000*1.4026 = \$1402.60 2. Calculate the future value of \$60,000 at 12% for (i) 5 years, (ii) 20 years. (i) FV = 60000*1.7623 = \$105,738 (ii) FV = 60000*9.6463 = \$578,778 3. How much money would Ruby Carter need to deposit in her savings account at Great  Western Bank today in order to have \$16,850.58 in account after 5 years?  Assume she  makes no other deposits, or withdrawals and the bank guarantees an 11 percent annual  interest rate, compounded annually. 16850.58 = X*1.6851, X = \$1,000 4. Starting today you invest \$1200 a year into your individual retirement account (IRA).  If  your IRA earns 12 percent per year, how much will be available at the end of 30 years. FVA = 1200*241.3327 = \$289,599

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.