If you borrow $100 today and repay with 6% simple interest one year from now, which of the following would be a correct time line entry?
1) -100 AT YEAR 0
2) -106 AT YEAR ONE
3) 106 AT YEAR ONE
4) 100 AT YEAR ONE
You invest $600 an an annual rate of 7% for fifteen years. How much more interest would you earn in year 11 with compound vs. simple interest and for the whole 15 years?
You plan to buy a new car when you graduate in 2 years. The car you want currently costs $25,000 and car prices are expected to increase at an annual rate of 4% per year. What will your car cost by the time you graduate? Suppose you wait another 3 years after graduation to make your purchase?
If you can earn 6% per year, how much would you have to invest today to be able to purchase the car in #3 in two years? In five years?