Note: Some of these problems require the use of the time value of money tables in the chapter appendix, or a financial calculator or spreadsheet software.) Using the rule of 72, approximate the follo

Note: Some of these problems require the use of the time value of money tables in the chapter appendix, or a financial calculator or spreadsheet software.)

Using the rule of 72, approximate the following amounts. (LO 1.1)

1. If the value of land in an area is increasing 6 percent a year, how long will it take for property values to double?

2. If you earn 10 percent on your investments, how long will it take for your money to double?

3. At an annual interest rate of 5 percent, how long will it take for your savings to double?

4. What would be the yearly earnings for a person with $6,000 in savings at an annual interest rate of 2.5 percent? (LO 1.3)

   
   Using time value of money tables (pg. 35 – Future value of an annuity), calculate the following. (LO 1.3)
   

5. Carla Lopez deposits $3,000 a year into her retirement account. If these funds have an average earning of 8 percent over the 40 years until her retirement, what will be the value of her retirement account? (LO 1.3)

6. 
   .
   
   If a person spends $10 a week on coffee (assume $500 a year), what would be the future value of that amount over 10 years if the funds were deposited in an account earning 3 percent? (LO 1.3)