Al Rosen invests $25,000 in a mint condition 1952 Mickey Mantle Topps baseball card. He expects the card to increase in value 12 percent per year for the next 10 years How much will his card be worth after 10 years' Solution Appendix a FV=PVX FVIF (12%, 10 periods) $25000x3.106=$77,650 9-14 Dr. Ruth has been secretly depositing $2, 500 in her savings account every December starting in 1995. Her account earns 5 percent compounded annuall How much will she have in december of 2004?(Assume that a deposit is made in 2004.) Make sure to carefully count the years Solution: ppendⅸxC FVA=AX FVIEA (5%0, 10 periods FVA=$2,500x12.578=$31,445 9-15 At a growth(interest)rate of 9 percent annually, how long will it take for a sum to double? To triple? Select the year that is closest to the correct answer Solution: Appendix a If the sum is doubling, then the interest factor must equal 2 s In Appendix A, looking down the 9% column, we find the factor closest to 2(1.993)on the 8-year row. The factor closest to 3 (3.066)is on the 13-year row CopyrightC 2005 by The McGray-Hill Companies, Inc. S-312Copyright © 2005 by The McGraw-Hill Companies, Inc. S-312 9-13. Al Rosen invests $25,000 in a mint condition 1952 Mickey Mantle Topps baseball card. He expects the card to increase in value 12 percent per year for the next 10 years. How much will his card be worth after 10 years? Solution: Appendix A FV = PV x FVIF (12%, 10 periods) = $25,000 x 3.106 = $77,650 9-14. Dr. Ruth has been secretly depositing $2,500 in her savings account every December starting in 1995. Her account earns 5 percent compounded annually. How much will she have in December of 2004? (Assume that a deposit is made in 2004.) Make sure to carefully count the years. Solution: Appendix C FVA = A x FVIFA (5%, 10 periods) FVA = $2,500 x 12.578 = $31,445 9-15. At a growth (interest) rate of 9 percent annually, how long will it take for a sum to double? To triple? Select the year that is closest to the correct answer. Solution: Appendix A If the sum is doubling, then the interest factor must equal 2. * In Appendix A, looking down the 9% column, we find the factor closest to 2 (1.993) on the 8-year row. The factor closest to 3 (3.066) is on the 13-year row