What was the effective annual rate of return that you earned

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Question 1: You invest $10,000 today. You earn 5% compounded annually. How much money will be in your account in 6 years?

Question 2: You are buying an investment that promises to pay you $20,000, 10 years from now. You wish to earn 11% compounded annually. How much should you pay for the investment today?

Question 3: You purchased a security 5 years ago for $1,000. Today you sold the security for $1,500. What was the effective annual rate of return that you earned?

Question 4: You sold a widget for $100 today. You originally purchased the widget for $40. If you earned an effective annual rate of return of 10%, how many years did you own the investment?

Question 5: You are saving for retirement. You are depositing $2,400 per year into an investment account. The deposits are made at the end of each year. The investment account earns 8% compounded annually. How much money will be in the account 30 years from now?

Question 6: For the past 40 years your parents have deposited $6,000 into an investment account. The deposits were made at the beginning of each year. There is currently $600,000 in the account. What was the effective annual rate of interest your parents earned?

Question 7: You wish to retire in 35 years. You want to have $2,500,000 when you retire. You decide to contribute to retirement savings account every year. You will make the contributions at the end of every year. You will earn 7% compounded annually. How much must you contribute every year?

Reference no: EM132485464

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