Question 1. For each of the following, compute the Present value:
|
Present Value
|
Years
|
Interest rate
|
Future value
|
|
|
6
|
7%
|
15,451
|
|
|
7
|
13
|
51,557
|
|
|
23
|
14
|
886,073
|
|
|
18
|
9
|
550,164
|
Question 2. Suppose you are still committed to owning a $170,000 Ferrari. If you believe your mutual fund can achieve a 12 percent annual rate of return and you want to buy the car in 9 years on the day you turn 30, how much must you invest today?