Week 9 - Time Value of Money Chapter 9

a. If you invest $10,000 today, how much will you have in:

2 years @ 7%

7 years @ 10%

25 years @ 15%

*25 years @ 18% *compounded semi-annually for this last scenario.

b. If you invest $2,000 per year in a retirement account, how much will you have in:

8 years at 8%

10 years at 9%

12 years at 10%

15 years at 11%

c. How much would you have to invest today to receive:

$18,000 in 8 years at 10%

$22,000 in 12 years at 13%

d. How much would you have to invest today to receive:

$10,000 per year for 5 years at 9%

$25,000 per year for 25 years at 8%

e. Your uncle offers you a choice of $28,000 in 50 years OR $150 today?

If money is discounted at 12%, which should you choose? (You must show the PV or FV

calculation to earn any credit.)