Please show your work for the following answers: 1. Jim Emig has $6,000. Require
ID: 2459959 • Letter: P
Question
Please show your work for the following answers:
1. Jim Emig has $6,000.
Required: Calculate the future value of the $6,000 at 12% compounded quarterly for 5 years. Round your answer to the nearest cent.
2. Cathy Lumbattis inherited $140,000 from an aunt.
Required: If Cathy decides not to spend her inheritance but to leave the money in her savings account until she retires in 15 years, how much money will she have, assuming an annual interest rate of 8%, compounded semiannually? Round your answer to the nearest cent.
3.LuAnn Bean will receive $7,000 in 7 years.
Required: What is the present value at 7% compounded annually? Round your answer to the nearest cent.
4. A bank is willing to lend money at 6% interest, compounded annually.
Required: How much would the bank be willing to loan you in exchange for a payment of $600 4 years from now? Round your answer to the nearest cent.
5. Ed Walker wants to save some money so that he can make a down payment of $3,000 on a car when he graduates from college in 4 years.
Required: If Ed opens a savings account and earns 3% on his money, compounded annually, how much will he have to invest now? Round your answer to the nearest cent.
6. Kristen Quinn makes equal deposits of $500 semiannually for 4 years.
Required: What is the future value at 8%? Round your answer to the nearest cent.
7. Chuck Russo, a high school math teacher, wants to set up an IRA account into which he will deposit $2,000 per year. He plans to teach for 20 more years and then retire.
Required: If the interest on his account is 7% compounded annually, how much will be in his account when he retires? Round your answer to the nearest cent.
Explanation / Answer
Ans 1. Pv=$6000,i=12% i.e quarterly is 0.04, n=5 year
So FV=PV(1+i)n=6000(1+.12/3)^5*3=6000*1.8=$10,05.67
So FV=$140000(1.04)15*2=$140000(3.24)=$454075.65