1. Future values are generally larger than present values when invested in conservative financial instruments such as bank certificates of deposits.
2. Vaughn Manufacturing wishes to accumulate $2150000 by May 1, 2025 by making 8 equal annual deposits beginning May 1, 2017 to a fund paying 9% interest compounded annually. What is the required amount of each deposit?
3. You are 30 years of age and wish to retire at 70. Your plan is to live off $90,000/year until you turn 95. Your plan is to save $25,000/year until you turn 70. Assume a 5% opportunity cost. Make a plan.