interest 5. Using Time Value to Estimate Savings. DeMarcus wants to retire with

Question

interest 5. Using Time Value to Estimate Savings. DeMarcus wants to retire with $1 million in savings by the time he turns 60. He is currently 18 years old. How much will he need to save each year, assuming he can ge ta 12% annual return on his investments? 6. Present Value. Cheryl wants to have $2,000 in spending money to take on a trip to Disney World in three years. How much must she deposit now in a savings account that pays 5% per year to have the money she needs in three years? Z Present Value. Juan would like to give his newly born grandson a gift of $10,000 on his 18th birthday. Juan can earn 7% annual interest on a certificate of deposit. How much must he deposit now to achieve his goal? 8. Present Value. Winners of the Georgia Lotto drawing are given the choice of receiving the winning amount divided equally over 20 years or as a lump-sum cash ontion nm

Explanation / Answer

1.

FV=1000000

N=42

I/Y=12%

PV=0

CPT PMT=1036.96

2.

FV=2000

I/Y=5%

PMT=0

N=3

CPT PV=1727.68

3.

FV=10000

I/Y=7%

PMT=0

N=18

CPT PV=2958.64

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