a) Suppose 5,000€ are deposited in an account that earns 5% interest compounded semiannually. You retire 20€ per year. How much money will there be in the account after 25 years?

b) If you have $20,000, how much money you will have in 30 years if you earn:

2% annually?

2% per quarter compounded monthly?

2% compound monthly?

c) You receive $10,000 every five years, $2,000 every two years, $1,000 every year, and $500 per month for the next 100 years. Find the Present Worth for this cash flow if the interest rate is 24%. You must clearly show the factors used to solve the problem.

d) How much money would you have after 30 years if you invest $250 every month for 30 years using a 6% interest compounded quarterly? Show all your work.

e) A company with a MARR of 15% is considering investing in a 1 million dollar project that would have a net benefit of $10,000 in the first year, which increases by 3% per year for 20 years. In year 10 you will have to invest an additional $50,000 for a major overhaul. After 20 years the investment has a salvage value of $20,000. Is this investment economically feasible for the company?

Solve the problem using your calculator

Solve the problem using the NPV formula in Excel