Reference no: EM132580299

Calculate the value that is requested for each problem. It shows the formula used and the computations for each problem.

1. Jane Morrison is planning to invest $ 25,000 today in a mutual fund that provides an 8% return on annual compound interest. What will be the value of the investment in ten years?

2. Ramón Rivera is investing $ 7,500 in a CD from a bank that pays 6% annual compound interest. How much will you have earned at the end of five years?

3. María Lebrón is estimated an investment that pays 7.6% of compound annual interest. How much will you invest today if you expect this investment to generate $ 25,000 in six years?

4. Elizabeth Terrier wants to accumulate $ 12,000 after 12 years. If the annual compound interest rate your savings account pays is 9.25%, how much money will you have to deposit into your account today to achieve your goal?

5. Carolina Carlo needs to decide whether to accept a $ 17,000 bonus today or wait two years and receive $ 20,100. The annual compound interest rate at which she could invest is 6%. What should Carolina do?

6. How much more would you earn in three years, if you invest $ 10,000 at an annual compound interest rate of 5.75%, instead of a simple interest rate of 5.75%?

7. What would be the compound annual interest rate you would need to double your $ 1,000 investment in three years?

8. If your bank pays you 5% annual interest, compounded monthly, how much would you have in ten years if you invest $ 1,000 today?

9. How much would you have to deposit today in a bank account that pays 9.25% annual interest, compounded quarterly, if you expect to have $ 20,000 at the end of five years?

10. Suppose you invested $ 2,500 in the business that a friend of yours opened and that in three years this friend returned $ 3,700 to you. How much is the return on your investment in your friend's business?