Mr. Smith has just invested $10,000 for his son (age 7). The money will be used for his son's education 15 years

Mr. Smith has just invested $10,000 for his son (age 7). The money will be used for his son's education 15 years from now. He calculates that he will need $100,000 for his son's education by the time the boy goes to school. What rate of return will Dr. Stein need to achieve this goal?

A. between 9% and 10%
B. between 16% and 17%
C. between 10% and 11%
D. between 15% and 16%

PVIF = PV (App. B: 15 periods)
FV
= $10,000 = 0.10 Return: between 16% and 17%
$100,000

The future value of a $500 investment today at 10 percent annual interest compounded semiannually for 5 years is

A. $805
B. $814
C. $750
D. $923

FV = PV x FV_IF (App. A: 5%, 10 periods)
= $500 x 1.629 = $814

Dan would like to save $1,500,000 by the time he retires in 25 years and believes he can earn an annual return of 8%. How much does he need to invest in each of the following years to achieve his goal?

A. $20,518
B. $40,850
C. $18,900
D. $58,000
E. $25,304

(App. C: 8%, 25 periods)
= $1,500,000 = $20,518
73.106