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Unformatted text preview: 2 7. Suppose you need $40,000 in 10 years and can earn 4% per year. How much do you need to invest today as a lump sum? Present Value  Discounting FV 40,000.00 t 10 r 4.00% PV 27,022.57 8. You need $30,000 and can earn 6%. You currently have $5,000. How many years until you will have the amount you need? Number of Periods FV 30,000.00 PV 5,000.00 r 6.00% t 30.75 9. A relative invested $5,000 40 years ago and just left you the account worth $100,000. What compounded rate did your relative earn? Rate of Return FV 100,000.00 PV 5,000.00 t 40 r 7.78% 10. You want to begin saving for your daughter’s college education and you estimate that she will need $150,000 in 17 years. If you feel confident that you can earn 8% per year, how much do you need to invest today? Present Value  Discounting FV 150,000.00 t 17 r 8.00% PV 40,540.34...
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This note was uploaded on 11/29/2011 for the course FINANCE 332 taught by Professor Linney during the Fall '11 term at Guilford Tech.
 Fall '11
 Linney
 Finance, Future Value

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