How much should Julia invest right now if she wants to spend $25,000 to purchase

Question

How much should Julia invest right now if she wants to spend $25,000 to purchase a new car 7 years from now? Assume an interest rate of 11% per year 1. 2. A local business is trying to upgrade its current software, which has an initial fee of S30,000. The upgrade is expected to save them $5,000 in year 1 and increase by $600 each year thereafter. At an interest rate of 14% per year, what is the annual worth of the purchase over 7 years? A new tech startup company initially invested $100,000 and has a $55,000 revenue intake starting in year 1. Research & Development (R&D) projects annual fees of $10,750 (starting at year 1). R&D also projects a yearly increase of $6,500 in revenue after new software is implemented in year 4 (first increase is in year 5). What is the present worth of these cash flows over 10 years at an interest rate of 10% per year? 3. Pioneer Valley Credit Union is offering an interest rate of 7% per year, compounded monthly. a.) Determine the nominal rate per 6 months. b.) Determine the effective interest rate per year 4, Income from a local law firm has averaged S 30,000 every 3 months for 4 ½ years, what is the future worth of the income (after the 4% years) at an interest rate of 8% per year, compounded quarterly? 5.

Explanation / Answer

Amount of compound interest formula:
Amount = P*(1+r)n
25000 = P * 1.117
P = 25000/1.117 = $12041.46

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