Determining the selling price

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1) Murphy's annual income has increased by 10% per year for the last 8 years. If Murphy's annual income is now $72,596, what was it 8 years ago? Round to the nearest dollar.

2) Doris is retiring today and she plans to buy a new car for $25,000 seven years from now and a second new car for $40,000 seventeen years from now. How much "new car money" should she set aside now if she can expect to earn 8½% compounded annually on her savings? Round to the nearest dollar.

3) A 25-year, $1,000 strip bond was first issued at 5.5% compounded semiannually. Five years before maturity it was sold on the bond market at a price that would provide the purchaser with a yield rate of 6.8% compounded semiannually. To the nearest dollar, what was the selling price at that time?

Reference no: EM133087498

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