Chat with AI
PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
Edition 5ISBN: 978-1305661707PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
Edition 5ISBN: 978-1305661707 Exercise 3
Calculating present and future values. Use future or present value techniques to solve the following problems.
a. If you inherited $45,000 today and invested all of it in a security that paid a 7 percent rate of return, how much would you have in 25 years?
b. If the average new home costs $275,000 today, how much will it cost in 10 years if the price increases by 5 percent each year?
c. You think that in 15 years, it will cost $214,000 to provide your child with a 4-year college education. Will you have enough if you take $75,000 today and invest it for the next 15 years at 4 percent?
d. If you can earn 4 percent, how much will you have to save each year if you want to retire in 35 years with $1 million?
a. If you inherited $45,000 today and invested all of it in a security that paid a 7 percent rate of return, how much would you have in 25 years?
b. If the average new home costs $275,000 today, how much will it cost in 10 years if the price increases by 5 percent each year?
c. You think that in 15 years, it will cost $214,000 to provide your child with a 4-year college education. Will you have enough if you take $75,000 today and invest it for the next 15 years at 4 percent?
d. If you can earn 4 percent, how much will you have to save each year if you want to retire in 35 years with $1 million?
Explanation
Verified
Verified
Present value refers to value of an amou...
PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
Why don’t you like this exercise?
Other Minimum 8 character and maximum 255 character
Character 255
