# After placing \$8,000 in a savings account paying annual compound interest of 7%, calculate the amount that will accumulate if it is left for 10 years?

1.     After placing \$8,000 in a savings account paying annual compound interest of 7%, calculate the amount that will accumulate if it is left for 10 years?

2.     After placing \$13,000 in a savings account paying annual compound interest of 4%, Leona will accumulate what amount if she leaves the money in the bank for 3 years?

3.     What is the present value of a \$650 perpetuity discounted back to the present at 12%? What is the present value of the perpetuity?

4.     What is the present value of a perpetual stream of cash flows that pays \$80,000 at the end of one year and grows at a rate of 7% indefinitely? The rate of interest used to discount the cash flows is 9%. What is the present value of the growing perpetuity?

5.     How much do you have to deposit today so that beginning 11 years from now, you can withdraw \$9,000 a year for the next eight years (periods 11 through 18) plus an additional amount of \$18,000 in the last year (period 18)? Assume an interest rate of8%. What is the amount of money you would need to deposit today?

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