Question 1. You wish to retire in 18 years, at which time you want to have accumulated enough money to receive an annuity of $14,000 a year for 20 years of retirement. During the period before retirement , you can earn 11% annually and after retirement you can earn 8% annually. What annual contributions will allow you to receive $14,000 annually.
Question 2. Mike has been depositing $2500 in a savings account each December starting in 1991. The account earns 5% compounded annually. How much will he have in December 2000. (assume a deposit is made in December 2000).
Question 3. Joe will receive $19,500 a year for the next 20 years as a payment for a song he has written. If a 10% rate is applied, should he be willing to sell out all future rights now for $160,000?