For each question, answer with the requirements (a - d) using excel:
a. Develop the timeline (linear representation of the timing of cash flows)
b. Identify the time value of money variable (PV, FV, PMT, N or Rate) which needs to be calculated in the question.
c. Identify the values of the remaining four variables (PV, FV, PMT, N or Rate) from the question. Be sure to input positive or negative signs.
d. Calculate the correct value of the variable identified in step (2).
1. The day Harry was born, his parents put $1200 into an investment account that promises to pay a fixed interest rate of 6 percent per year. How much money will Harry have in this account when he turns 21 (round to nearest $1)?
2. At what rate must $287.50 be compounded annually for it to grow to $650.01 in 14 years?
3. How much money must be put into a bank account yielding 6.42% (compounded annually) in order to have $1,671 at the end of 11 years (round to nearest $1)?
4. Biff deposited $9,000 in a bank account, and 10 years later he closes out the account, which is worth $18,000. What annual rate of interest has he earned over the 10 years?