Reference no: EM132579917

Calculate the value requested for each problem. Provide the formula used, and the computations for each problem.

Question 1. Jane Morrison is planning to invest $25,000 today in a mutual fund that provides an annual compound interest yield of 8%. What will be the value of the investment in ten years?

Question 2. Rivera is investing $7,500 in a CD from a bank that pays 6% annual compound interest. How much will he have earned at the end of five years?

Question 3. Maria Lebron is considering an investment that pays 7.6% annual compound interest. How much would she have to invest today if she expects this investment to generate $25,000 in six years?

Question 4. Elizabeth Terrier wants to accumulate $12,000 after 12 years. If the annual compound interest rate paid by her savings account is 9.25%, how much money would she have to deposit into the account today to achieve her goal?

Question 5. Carolina Carlo needs to decide whether to accept a $17,000 bonus today or wait two years and receive $20,100. The annual compound interest rate at which she could invest is 6%. What should Carolina do?

Question 6. How much more would you earn in three years, if you invested $10,000 at an annual compound interest rate of 5.75%, instead of at a simple interest rate of 5.75%?

Question 7. What would be the compound annual interest rate you would need to double your $1,000 investment over three years?

Question 8. If your bank pays you 5% annual interest, compounded monthly, how much would you have in ten years if you invest $1,000 today?

Question 9. How much would you have to deposit into a bank account that pays 9.25% annual interest, compounded quarterly, if you expect to have $20,000 by the end of five years?

Question 10. Suppose you invested $2,500 in the business that a friend of yours opened and that in three years this friend gave you back $3,700. How much was your investment return in your friend's business?