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How much money could you take out at the end

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1. How much will $20,000 invested today at 3% interest be worth in 5 years if it is compounded Annually?Monthly?

2. If we receive $5,000 eight years from now, how much is that equivalent to today, if we believe that we can earn 5% on other opportunities?

3. If you have $8,500 today, and you could earn 3% interest per year, how many years would it be before you would accumulate $10,000 (assume annual compounding)?

4. How much must you put into a 5% investment annually to have $75,000 eight years from now? Assume all payments are made the end of each period.

5. If you could put $5,000 into a 6% investment at the end of each year, how much money could you take out at the end of 7 years?

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The solution talks about the calculations relating to time value of money. The questions relates to calculations of Future Value, Present Value in case of lumpsum payment, Annuity calculations, and FV and PV calculation in case of annuity payments.

Reference no: EM131010499

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