1. Payton bought a 15-year treasury bond for a face amount of $700. The 2.5% interest will be compounded quarterly. What will the future value of Patrick's investment be when he goes to cash it in on the maturity date 15 years from now? (
2. Jessica deposits $5,000 at the end of each year in an account earning 2.45% interest, compounded annually. What is the future value of this annuity after 5 years of investing?
3. Ralph is 27 years old and starting an IRA (individual retirement account). He is going to invest $200 at the beginning of each month. The account is expected to earn 2.65% interest, compounded monthly. How much money will Ricky have in his IRA when he retires, at age 65?
4. Gayle starts to save at age 20 for an extended vacation around the world that she will take on her 45th birthday. She will contribute $1000 each year to the account, which earns 1.65% annual interest, compounded quarterly. What is the future value of this investment when she takes her trip?
5. Earl opens a savings account with $5,000. He deposits $1500 each year into the account that compounds quarterly and has a 0.65% interest rate. What will his account total be in 5 years?
Essay
6. List at least two technology tools that can help with calculating future value of an investment. Using complete sentences, explain which tool you prefer to use and why.
7. Carmen is planning to invest $200 in a retirement account at the beginning of each month for the next 20 years. The account is earning 3.15% interest, compounded annually. He used the following formula and variables to solve for the future value of the account after 20 years.
FVOA = Future Value of an Ordinary Annuity
C = 2400
n = 1
t = 20
i = 0.0315
He found that the future value of this account will be $65481.95. Is Carmen's solution correct? If not, explain what he did wrong and provide the correct solution.