You are depositing $1,500 in a retirement account today and expect to earn an average return of 7.5 percent on this money

You are depositing $1,500 in a retirement account today and expect to earn an average return of 7.5 percent on this money. How much additional income will you earn if you leave the money invested for 45 years instead of just 40 years?    A.  $10,723.08 B.  $11,790.90 C.  $12,441.56 D.  $12,908.19 E.  $13,590.93 Future value = $1,500 × (1 + .075)45 = $38,857.26 Future value = $1,500 × (1 + .075)40 = $27,066.36 Difference = $38,857.26 - $27,066.36 = $11,790.90

33.

You collect old coins. Today, you have two coins each of which is valued at $300. One coin is expected to increase in value by 6 percent annually while the other coin is expected to increase in value by 4.5 percent annually. What will be the difference in the value of the two coins 15 years from now?    A.  $138.38 B.  $208.04 C.  $241.79 D.  $254.24 E.  $280.15 Future value = $300 × (1 + .06)15 = $718.97 Future value = $300 × (1 + .045)15 = $580.58 Difference = $718.97 - $580.58 = $138.38

34.

Your father invested a lump sum 26 years ago at 4.25 percent interest. Today, he gave you the proceeds of that investment which totaled $51,480.79. How much did your father originally invest?    A.  $15,929.47 B.  $16,500.00 C.  $17,444.86 D.  $17,500.00 E.  $17,999.45 Present value = $51,480.79 × [1/(1 + .0425)26] = $17,444.86

35.	What is the present value of $150,000 to be received 10 years from today if the discount rate is 11 percent?    A.  $52,827.67 B.  $61,147.07 C.  $64,141.41 D.  $69,806.18 E.  $73,291.06 Present value = $150,000 × [1/1 + .11)10] = $52,827.67