1. Twenty years ago, you deposited $6,832 into an account. Fifteen years ago, you added an additional $9,701 to your account. You earned 5.15 percent, compounded annually, for the first 5 years and 8.26 percent, compounded annually, for the last 15 years. What is the value of your account today?
2. Suppose you are committed to owning a $221,354 Ferrari. If you believe your mutual fund can achieve a 9.62 percent annual rate of return, and you want to buy the car in 13 years on the day you turn 30, how much must you invest today?
3. You’re trying to save to buy a new $152,325 Ferrari. You have $38,420 today that can be invested at your bank. The bank pays 4.15 percent annual interest on its accounts. How long (in years) will it be before you have enough to buy the car?