Reference no: EM132005637

1. You estimate that you will need $860 thousand in 30 years to buy some cybernetic body enhancements, including infrared vision, retractable claws, and expanded brain storage capacity. To achieve your financial goal, you want to make three equal-sized deposits into an account paying a fixed annual rate of 7.02%. The first deposit will be made right now, the second 10 years from now, and the third 20 years from now. What is the size of each deposit you need to make in order to partake of future cybernetic goodness? (Hint: draw this out on a timeline.)

2. 6 years ago you started making annual deposits of $420 into an account paying 8% annual return. You continue to make these deposits every year without fail. If you keep doing this every year for the next 5 years, how much money will you have in 5 years?

3. Last year, you earned a rate of return of 8.27 percent on your bond investments. During that time, the inflation rate was 2.6 percent. What was your real rate of return?Use the exact relationship between real and nominal rates. Enter answer in percents, accurate to two decimal places.