Question

Assume that you are nearing graduation and that you have applied for a job with a local bank, First Commercial Bank. As part of the bank's evaluation process, you have been asked to take an examination that covers several financial analysis techniques. The first section of the test addresses time value of money analysis. See how you would do by answering the following questions. i. You need to have $80,000 at the end of 12 years. To accumulate this sum, you have decided to save a certain amount at the end of each of the next 10 years and deposit it in the bank.The bank pays 10 percent interest compounded annually for long-term deposits. How much will you have to save each year (to the nearest dollar)? Sara wants to accumulate a sum of money in her bank account by depositing $1500 at the beginning of each year. If interest on the account is 9% compounded annually for 7 years,how much she will end up with in 7 years?ii. iii. If you deposit $15,000 today in an account that pays 7.5% annual interest, how long will it take to have $25,000 in your account?

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