1. ABC Company is considering an investment that will cost the company $477 at time=0. The after-tax cash flows are expected to be $91 each year for 12 years. What is the payback period?
2. You currently have $55,000 in your retirement account. You will make deposits of $2,750/quarter into your account for the next 20 years. If the account earns 8% compounded quarterly, calculate how much you have in your account when you retire in 20 years.
3. Beginning three months from now, you want to be able to withdraw $2,300 each quarter from your bank account to cover college expenses. The account pays 1.75 percent interest per quarter. How much do you need to have in your account today to meet your expense needs over the next four years?