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How much will Lee receive at the end of six years

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Q1. Lynn Ally, owner of a local Subway shop, loaned $40,000 to Pete Hall to help him open a Subway franchise. Pete plans to repay Lynn at the end of 8 years with 6% interest compounded semiannually. How much will Lynn receive at the end of 8 years?

Q2. Lee Wills loaned Audrey Chin $16,000 to open Snip Its Hair Salon. After 6 years, Audrey will repay Lee with 8% interest compounded quarterly. How much will Lee receive at the end of 6 years?

Q3. Sam Long anticipates he will need approximately $225,000 in 15 years to cover his 3-year-old daughter's college bills for a 4-year degree. How much would he have to invest today at an interest rate of 8% compounded semiannually?

Q4. Jazelle Momba wants to visit her family in Zimbabwe in 2025, which is 6 years from now. She knows that it will cost approximately $8,000 including flight costs, on-the-ground costs, and extra spending money to stay for 4 months. If she opens an account that compounds interest at 4% semiannually, how much does she need to deposit today to cover the total cost of her visit?

Q5. Pete Air wants to buy a used Jeep in 5 years. He estimates the Jeep will cost $15,000. Assume Pete invests $10,000 now at 12% interest compounded semiannually. Will Pete have enough money to buy his Jeep at the end of 5 years?

Q6. You choose to invest your $2,985 income tax refund check (rather than spend it!) in an account earning 5% compounded annually. How much will the account be worth in 30 years?

Q7. Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a new roof in 7 years. He estimates the roof will cost him $9,000 at that time. What amount should Jim invest today at 6% compounded quarterly to be able to pay for the roof?

Q8. Tony Ring wants to attend Northeast College. He will need $60,000 4 years from today. Assume Tony's bank pays 12% interest compounded semiannually. What must Tony deposit today so he will have $60,000 in4 years?

Q9. How much could you save for retirement if you chose to invest the money you spend on Starbucks coffee in one year? Assume you buy one venti cup of café latte for $4.15 each weekday for 50 weeks and can invest the total amount in a mutual fund earning 5% compounded annually for 30 years.

Q10. Paul Havlik promised his grandson Jamie that he would give him $6,000 8 years from today for graduating from high school. Assume money is worth 6% interest compounded semiannually. What is the present value of this $6,000?

Reference no: EM132867418

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