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What is the present value

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1. What is the present value of ?$800 to be received 12 years from now discounted back to the present at 8 ?percent?

2.You are considering investing in a security that will pay you ?$1,000 in 25 years.

A. If the appropriate discount rate is 10 percent?, what is the present value of this? investment?

B. Assume these investments sell for ?$359 in return for which you receive ?$1,000 in 25 years. What is the rate of return investors earn on this investment if they buy it for ?$359??

3. Sarah Wiggum would like to make a single investment and have ?$2.0 million at the time of her retirement in 35 years. She has found a mutual fund that will earn 4 percent annually. How much will Sarah have to invest? today? If Sarah earned an annual return of 14 ?percent, how soon could she then? retire?

A. If Sarah can earn an annual return of 14 percent?, the number of years until she could retire __________ years.  ?(Round to one decimal? place.)

Reference no: EM133110574

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