Reference no: EM131090649

Question 1 - Sarah Wiggum would like to make a single investment and have $1.6 million at the time of her retirement in 35 years. She has found a retirement fund that will earn 4% annually. How much will Sarah have to invest today? If she earned an annual return of 18%, how soon could she then retire?

Question 2 - How many years will it for $500 to grow to $1,051.82 at 10% compounded annually?

Question 3 - What is the present value of a perpetual stream of cash flows that pays $80,000 at the end of one year and grows at a rate of 7% indefinitely? The rate of interest used to discount the cash flows is 9%. What is the present value of the growing perpetuity?

Question 4- To pay for your education you have taken out $28,000 in student loans. If you make monthly payments over 13 years at 6% compounded monthly, how much are your monthly student loan payments?

Question 5 - You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:

Investment
End of Year	A	B	C
1	$1,000	$1,000	$5,000
2	2,000	1,000	5,000
3	3,000	1,000	(5,000)
4	(4,000)	1,000	(5,000)
5	4,000	3,000	15,000

What is thaw present value of each if these three investments if the appropriate discounts rate is 13%?