1. Use Future or present value techniques to solve the following problems: a. St
ID: 2690926 • Letter: 1
Question
1. Use Future or present value techniques to solve the following problems: a. Starting with $20,000, how much will you have in 20 years if you can earn five percent on your money? b. If you inherited $100,000today and invested all of it in a security that paid an eight percent rate of return, how much would you have in 15 years? c. If the average new home costs $200,000 today, what will be the value in 10 years if the inflation is four percent per year? d. if you earn nine percent per year, how much will you save each year if you want to retire in 40 years with $3 million?Explanation / Answer
a. PV = $20,000, N = 20, I = 5%, Solve for FV = $53,066 b. PV = $100,000, I = 8%, N = 15, Solve for FV = $317,217 c. PV = $200,000, N= 10, I= 4%, solve for FV = $296,049 d. I = 9%, N = 40, FV = $3 million, Solve for PMT = $8,879
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