1. An ambitious young graduate wants to purchase a 1.BMW SUV in four years. The cost in four years will likely be $89,004.00. The graduate will try to save the entire price of the car and pay cash to the dealer. To save the money, the young graduate will save $11,831.00 per year. The graduate can earn 6.00% APR on his investments. How much MORE money will the graduate need in four years to buy his dream car?
2. As an entrepreneur, you approach a venture capitalist seeking cash for funding your business. He does not want any equity in your firm, but instead he wants a yearly royalty forever. He wants a 10.00% royalty on your yearly revenues after the deal. You project to generate annual revenues of $147,700.00. The venture capitalist wants a 29.00% return on all his investments.