Question

1.          If you deposit $10,000 today in an account that earns 14.5% compounded annually, how much will the account be worth in 45 years?

2.          You have the opportunity to purchase an investment that will pay $1,625,000 at the end of 40 years. If your required rate of return on this investment is 13.2%, what is the maximum amount you should be willing to pay for it?

3.          Your grandparents deposited a $10,000 birthday check for you when you were born 22 years ago. Today, the account (to which no other deposits have been made) is worth $92,640. What annually compounded rate of return has the account earned?

4.          In going through some old papers, you find an account statement that shows a current balance of $857,000. The papers also show that the account has earned an annually compounded rate of return of 11%, and you know that the account was originally opened with a deposit of $10,000. Assuming that no other deposits have been made to the account since the original deposit, how long ago (in years) was the account opened?

5.          The estimated population of the United States from the 1990 census was 248,709,873. The total population estimate from the 2000 census was 405,122,176. What was the annual population growth rate during this period?

Answer 1

Q No
1	Value of account in 45 years	$4,428,400.59
2	Maximum amount to pay	$11,402.40
3	Rate	10.65%
4	Term in years	42.65
5	Rate	5.00%

Workings

AutoSave off 5 -A Book1 - Excel Sign in Comments Formulas Tell me what you want to do Share File Insert Page Layout Data Review View Help Home Draw Insert Delete Σ . Calibri A A 11 General Conditional Format as A E E Cell Sort & Find & Paste $ % B IU - Format Formatting Table Styles Filter Select Clipboard Alignment Number Styles Cells Editing Font Value of account in 45 years fix X C2 A C D E 1 Q No =FV(14.5%,45,-10000) Value of account in 45 years 2 1 3 PV(13.2 %,40p, -1625000) Maximum amount to pay 2 5 RATE(22,-10000,92640) 6 Rate 7 Term in years =NPER (11 % ,-10000,857000) 8 4 9 10 Rate RATE(10, 248709873,405122176) 5 11 12 13 14 15 16