1. How long much one wait for an initial investment of $1,000 to equal $4,500 in value if the investment earns 12% compounded annually? (Round to the nearest year)
a) 4 years
b) 6 years
c) 9 years
d) 13 years
2. Suppose we can invest $4,000 today and receive $6,200 in 4 years. What is the Net Present Value given a 10% expected return?
3. You have just been informed that you stand to inherit $60,000 in 10 years. You can't wait that long, and would like to receive the money now. At an interest rate of 8%, how much would you receive?
This solution shows step-by-step calculations in an Excel file to determine the future value of an initial investment, net present value, and present value of inheritance.