1. An investment offers to triple your money in 24 months (don’t believe it). What rate per six months are you being offered?
Rate %
2. Suppose you are committed to owning a $195,000 Ferrari. If you believe your mutual fund can achieve an annual return of 10.6 percent, and you want to buy the car in 8 years on the day you turn 30, how much must you invest today?
Amount to be invested $
3. A 12-year annuity pays $2,700 per month, and payments are made at the end of each month. The interest rate is 11 percent compounded monthly for the first six years, and 9 percent compounded monthly thereafter. What is the present value of the annuity?
Present value $