Chrris Rain Apparel Company Case Study

CHRIS SPEAR INVESTED $15,000 TODAY IN A FUND THAT EARNS 8% COMPOUNDED ANNUALLY. TO WHAT AMOUNT WILL THE INVESTMENT GROW IN 3 YEARS? TO WHAT AMOUNT WOULD THE INVESTMENT GROW IN 3 YEARS IF THE FUND EARNS 8% ANNUAL INTEREST COMPOUNDED SEMIANNUALLY?
PV=15,000 I=8% FV=? O N=3 3

15,000(1.25791) = 18,895.65
SEMIANNUALLY
PV=15,000 I=4% FV

0 N= 6 6

FVF3, 8%
15,000(1.26532) = 18,979.80

TONY BAUTISTA NEEDS $25,000 IN 4 YEARS. WHAT AMOUNT MUST HER INVESTED TODAY IF HIS INVESTMENT EARNS 12% COMPOUNDED ANNUALLY? WHAT AMOUNT MUST HE INVESTS IF HIS INVESTMENT EARNS 12% ANNUAL INTEREST COMPOUNDED QUARTERLY?
PV I= 12% FV=25,000

0 N= 4 PVFNI 25,000 X .63552
= 15,888 PV= 15,888 I= 3% FV= 25,000

0 N=16 4
25,000 X .62317 = 15,579

CANDICE WILLIS WILL INVESTS $30,000 TODAY. SHE NEEDS $150,000 IN 21 YEARS. WHAT ANNUAL INTEREST RATE MUST SHE EARN? PV=30,000 I=? FV= 150,000

0 N= 21 21
FV=PV(FVF 21,i) PV=FV(PVF 21,i)
150,000= 30,000X 30,000= 150,000
30,000 30,000 150,000 150,000
X=5 X=.2000
%= 8 %= 8

BO NEWMAN WILL INVEST $10,000 TODAY IN FUND THAT ERANS 5% ANNUAL INTEREST. HOW MANY YEARS WILL IT TAKE FOR THE FUND TO GROW TO $17,100. PV=10,000 I= 5% FV= 17,100

0 N?
17,100=10,000X 17,100= 10,000
10,000 10,000 17,100 17,100
X= 1.70 11 YEARS X= .584 11 YEARS