Reference no: EM131727468

1. Fifteen years ago, your parents opened an investment account with an initial deposit of $5,000.  Today, that account is worth $39,533.32.  What average annual rate of return did they earn on their investment?

2. You purchased a new sports car 40 years ago at a cost of $3,900.  Today, you sold that car for $97,500.  What annual rate of return did you earn on this vehicle?

3. The Corner Art Gallery purchased a painting for $68,000 two years ago.  Today the painting resold for $90,000. What annual rate of return did the gallery earn on this painting?

4. According to the Rule of 72, it will take ___________ years to double your money at a 6.4% rate of return.

5. Ten years ago, Zenia had a population of 4.6 million residents.  Today there are 6.3 million residents of Zenia.  What is the annual rate of population growth?

6. A farmer currently produces 45,000 bushels of corn a year.  He can increase his harvest by an average rate of 3% annually.  How long will it be until the farmer can produce 50,000 bushels of corn each year?

7. You just won a prize and will receive $5,000 today plus $5,000 one year from now.  What is the prize worth to you today if you can earn 9% annually on your investments?

8. A preferred stock pays a $6 annual dividend per share and provides investors with a 9% rate of return.  What is the current price per share?

9. What is the future value in 5 years of $100 received in one year, $200 received in two years, and $400 received in four years?  Assume a 5% rate of return.

10. What is the present value of $100 received in one year, $200 received in two years, and $400 received in four years?  Assume a 10% rate of return.

11. What is the present value of $1,000 received each year for the next two years, and $2,000 received in four years.  Assume a 8% discount rate.

12. What is the present value of $10,000 received each year for the next five years?  Assume a 10% discount rate.

13. How long would it take $100 to grow to $550 at 15% interest?