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21.
Gerold invested $5,600 in an account that pays 5 percent simple interest.
How much money will he have at the end of ten years?
22.
Alex invested $10,500 in an account that pays 6 percent simple interest.
How much money will he have at the end of four years?
23.
You invested $1,400 in an account that pays 5 percent simple interest. How
much more could you have earned over a 20-year period if the interest had
compounded annually?
24.
Travis invested $9,250 in an account that pays 6 percent simple interest.
How much more could he have earned over a 7-year period if the interest
had compounded annually?
25.
What is the future value of $6,200 invested for 23 years at 9.25 percent
compounded annually?
26.
Today, you earn a salary of $36,000. What will be your annual salary twelve
years from now if you earn annual raises of 3.6 percent?
27.
You own a classic automobile that is currently valued at $150,000. If the
value increases by 6.5 percent annually, how much will the automobile be
worth ten years from now?
28.
You hope to buy your dream car four years from now. Today, that car costs
$82,500. You expect the price to increase by an average of 4.8 percent per
year over the next four years. How much will your dream car cost by the
time you are ready to buy it?
29.
This morning, TL Trucking invested $75,000 to help fund a company
expansion project planned for 4 years from now. How much additional
money will the firm have 4 years from now if it can earn 5 percent rather
than 4 percent on its savings?
30.
You just received $225,000 from an insurance settlement. You have decided
to set this money aside and invest it for your retirement. Currently, your goal
is to retire 25 years from today. How much more will you have in your
account on the day you retire if you can earn an average return of 10.5
percent rather than just 8 percent?
31.
You just received a $3,000 gift from your grandmother. You have decided to
save this money so that you can gift it to your grandchildren 50 years from
now. How much additional money will you have to gift to your grandchildren
if you can earn an average of 8.5 percent instead of just 8 percent on your
savings?
32.
You are depositing $1,500 in a retirement account today and expect to earn
an average return of 7.5 percent on this money. How much additional
income will you earn if you leave the money invested for 45 years instead of
just 40 years?
33.
You collect old coins. Today, you have two coins each of which is valued at
$300. One coin is expected to increase in value by 6 percent annually while
the other coin is expected to increase in value by 4.5 percent annually. What
will be the difference in the value of the two coins 15 years from now?
34.
Your father invested a lump sum 26 years ago at 4.25 percent interest.
Today, he gave you the proceeds of that investment which totaled
$51,480.79. How much did your father originally invest?
35.
What is the present value of $150,000 to be received 10 years from today if
the discount rate is 11 percent?
36.
You would like to give your daughter $75,000 towards her college education
17 years from now. How much money must you set aside today for this
purpose if you can earn 8 percent on your investments?
37.
You want to have $25,000 saved 6 years from now to buy a house. How
much less do you have to deposit today to reach this goal if you can earn
5.5 percent rather than 5 percent on your savings? Today's deposit is the
only deposit you will make to this savings account.
38.
Your older sister deposited $5,000 today at 8.5 percent interest for 5 years.
You would like to have just as much money at the end of the next 5 years as
your sister will have. However, you can only earn 7 percent interest. How
much more money must you deposit today than your sister did if you are to
have the same amount at the end of the 5 years?
39.
A year ago, you deposited $40,000 into a retirement savings account at a
fixed rate of 5.5 percent. Today, you could earn a fixed rate of 6.5 percent
on a similar type account. However, your rate is fixed and cannot be
adjusted. How much less could you have deposited last year if you could
have earned a fixed rate of 6.5 percent and still have the same amount as
you currently will when you retire 38 years from today?
40.
When you retire 40 years from now, you want to have $1.2 million. You think
you can earn an average of 12 percent on your investments. To meet your
goal, you are trying to decide whether to deposit a lump sum today, or to
wait and deposit a lump sum 2 years from today. How much more will you
have to deposit as a lump sum if you wait for 2 years before making the
deposit?
