Q1. Joe, a Carlson School graduate is recently hired, requires $55,000 in 4 years to purchase the car of his dreams. If his investments earn 6% interest per year, find out how much should he invest at present?
Q2. As Joe doesn’t have sufficient cash at present to meet his goal he decides he must invest equal amounts over the next four years starting at the end of this year. If the fair interest rate is 6% yearly, find out how much will he require investing each year?
Q3. Find out how much would Joe require investing yearly if he invests an equivalent amount over the next four years starting instantly?
Q4. The great, great grand-parents of one of your classmates sold their factory to the government 104 years ago for $150,000. If such proceeds had been invested at 6%, find out how much would this legacy be worth at present? Suppose annual compounding.
Q5. An investment at present of $3,300 is worth $10,000 in 8-years. At what rate has your investment been growing (yearly) over the 8-years?