This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: ) to own his new car? 7. Derik plans to retire in 10 years. He needs $500,000 at retirement. His account earns 12% APR, compounded semiannually. How much does he need to have today to retire in 10 years? 8. This year, Amber began investing $100 a year in a savings club earning 5% annually. How much will she have in the club in 15 years? 9. Bob just won the lottery. He is due to receive $10,000 per year for the next 25 years. However, he has chosen to take a lump sum payment instead. The discount rate associated with the lottery is 5%. If Bob puts this lump sum settlement in an account earning 7% APR, compounded quarterly , how much will he have at the end of 25 years? *hint: this is a two part question. One bringing the PVA back from the future; Part 2 taking a lump sum back to the future. 10. What is the present value of a 10year $1,000 annuity discounted back to the present at 5%?...
View
Full Document
 Spring '09
 B
 lump sum

Click to edit the document details