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
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Transcribed Image Text:7. 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?
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