If you are earning a salary of $40,000 in 2016 and expect to receive 4% raises per annum on January 1, what do you anticipate your salary will be in 2025?
What is the future value of $5,000 invested for 15 years at 7.5% compounded annually?
You hope to buy your dream car 5 years from now. Today, that car costs $88,000 but you expect the price to increase by an average of 5% per year over the next five years. How much will your dream car cost by the time you are ready to buy it?
Your grandmother invested a lump sum for you 20 years ago earning 6% interest per year over that time. Today, she gave you the proceeds of that investment which is now worth $48,107. How much did she originally invest?
If you are earning a salary of $40,000 in 2016 and expect to receive 4% raises per annum on January 1, what do you anticipate your salary will be in 2025?
Salary in 2025 will be $ 56932
Working notes for the above answer
| Year | Growth | Salary |
| 2016 | 40,000 | |
| 2017 | 1.04 | 41,600 |
| 2018 | 1.04 | 43,264 |
| 2019 | 1.04 | 44,995 |
| 2020 | 1.04 | 46,794 |
| 2021 | 1.04 | 48,666 |
| 2022 | 1.04 | 50,613 |
| 2023 | 1.04 | 52,637 |
| 2024 | 1.04 | 54,743 |
| 2025 | 1.04 | 56,932 |
What is the future value of $5,000 invested for 15 years at 7.5% compounded annually?
Future Value $ 14794.39
Working notes for the above answer
Future value = P (1+R)N
fv = 5000 (1.075)15
fV=$ 14794.39
You hope to buy your dream car 5 years from now. Today, that car costs $88,000 but you expect the price to increase by an average of 5% per year over the next five years. How much will your dream car cost by the time you are ready to buy it?
Answer:
dream car cost =$ 106,795
Working notes for the above answer
| Year | Increse in price |
Salary |
| 1 | 88,000 | |
| 2 | 1.05 | 92,400 |
| 3 | 1.05 | 97,020 |
| 4 | 1.05 | 101,871 |
| 5 | 1.05 | 106,965 |
Your grandmother invested a lump sum for you 20 years ago earning 6% interest per year over that time. Today, she gave you the proceeds of that investment which is now worth $48,107. How much did she originally invest?
? =$ 14999.99
she originally invest= $
Working notes for the above answer
Pv = FV / (1+i)n
PV = 48107 / (1+0.06)20
PV =$ 14999.99
