Homework Templat and Example

Homework Templat and Example - -225,000 350,000 Component...

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Your Code: ABCDEF Chapter: 5 Problem: 6 Component I: You would like to help get your daughter started in business after she graduates from college. You currently have $225,000 and would like to make $350,000 available to her six years from now. What annual rate of return do you need to realize in order to achieve your goal? Component II: 0----------1---------2----------3----------4----------5----------6
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Unformatted text preview: -225,000 +350,000 Component III: FV = PV(1 + r ) t Solving for r , we get: r = (FV / PV) 1 / t – 1 r = ($350,000 / $225,000) 1/6 – 1 = .07641792 or 7.64% Component IV: 6-250000 +350000 N I/Y PV PMT FV 7.64179246 or 7.64% You would name this file “05_06_ABCDEF.doc”...
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