1. Stephen plans to purchase a car 2 years from now. The car will cost $39,166 at that time. Assume that Stephen can earn 6.46 percent (compounded monthly) on his money. How much should he set aside today for the purchase?
2. When might trying to adjust your firm's ratios to the industry averages NOT be a good idea?
3. Camila plans to go for vacation to Australia in 15 years from now. She estimates that she will need $20,046 for the trip. How much does she need to place in a saving account today that earns 8.85 percent per year (compounded quarterly) to accumulate this amount?