1. In 1626 Peter Minuit purchased Manhattan Island from the Native Americans for about $24 worth of trinkets. If the tribe had taken cash instead and invested it to earn 8% per year compounded annually, how much would the Indians have had in 1986, 360 years later? 8. You win a $1 million lottery, which pays you $50,000 per year for 20 years. How much is your prize really worth, assuming an interest rate of 8% per year? 9. Your great-aunt left you $20,000 when she died. You can invest the money to earn 12% per year. If you spend $3,540 per year out of this inheritance, how long will the money last?

1. In 1626 Peter Minuit purchased Manhattan Island from the Native Americans for about $24 worth of trinkets. If the tribe had taken cash instead and invested it to earn 8% per year compounded annually, how much would the Indians have had in 1986, 360 years later? 8. You win a $1 million lottery, which pays you $50,000 per year for 20 years. How much is your prize really worth, assuming an interest rate of 8% per year? 9. Your great-aunt left you $20,000 when she died. You can invest the money to earn 12% per year. If you spend $3,540 per year out of this inheritance, how long will the money last?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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