Present Value of an ordinary annuity

1. Sarah Wiggum would like to make a single investment and have $2.2 million at the time of her retirement in 25 years. She found a mutual fund that will earn 8% annually.  How much will Sarah have to invest today?

            Using the PV formula in Excel Sarah will have to invest $321,239.39

          If Sarah earned an annual return of 15%, how soon could she retired?

2. (Present Value of an ordinary annuity) What is the Present Value of $2,500 per year for 10 years discounted back to the present at 10 %?

3. (Present Value of an ordinary annuity) You are graduating from college at the End of this semester and after reading the The Business of Life box in this chapter, you have decided to invest $4,600 at the end of each year into a Roth IRA for the nest 43 years. If you earn 9% compounded annually on your investment, how much will you have when you retire in 43 years?

How much will you have if you wait 10 years before beginning to save and only make 33 payments into your retirement account? 

How much will you have when you retire in 43 years?