a. You have $10,000 to invest, at 5% annually and you will keep the money invested for 10 years. What will this amount grow to? b. You will need $15,000 in 7 years when you want to take a world...

a. You have $10,000 to invest, at 5% annually and you will keep the money invested for 10 years. What will this amount grow to?
b. You will need $15,000 in 7 years when you want to take a world cruise. If you can earn 6% annually how much do you need to invest now, in order to have the amount needed for the cruise?
c. You are working on saving for retirement. You will reach full retirement age in 20 years, and you c an invest $5000 each year and can earn 7% annually during this period. How much money will you have as you enter the retirement phase of your life, from this investment?
d. What is the amount a person who have to deposit today to be able to take out $5000 a year for 10 years from an account earning 8 percent annually?

4.2#3

View the TeachMeFinance.com animated audio slide show on “The Time Value of Money” at http://teachmefinance.com/timevalueofmoney.html. This slide show will walk you through an example of how to calculate the present and future values of money. How is each part of the formula used in that lesson equivalent to the formula presented in this text?

5.5

Analyze Mark’s budget as a financial planning tool for making decisions in the following situations. In each case, how will other financial planning tools affect Mark’s decisions? For each case, create a new budget showing the projected effects of Mark’s decisions.

1. 
   Mark injures himself on the cross-trainer, and the doctor recommends a course of physical therapy.


2. 
   A neighbor and coworker suggest that he and Mark commute to work together.


3. 
   The roofers inform Mark that his chimney needs to be repointed and relined.


4. 
   Mark wants to give up tutoring and put more time into his memorabilia business.


5. 
   Mark wants to marry and start a family and needs to know when would be a good time.