Professor Molloy plans to purchase a custom Maserati in five…
Professor Molloy plans to purchase a custom Maserati in five years in order to stave off a midlife crisis. He would like to have the sum of $200,000 in his Maserati purchase fund in exactly five years. Use the factors below or a financial calculator to determine the amount Professor Molloy would have to invest today in order to have his Maserati purchase fund grow to exactly $200,000 in five years if he can earn an 6% annual interest rate, compounded annually. Select the answer that is closest to (within $250 above or below) what you calculated. If an answer is more than $250 away from what you calculated, you should consider it incorrect. Present value of $1 – number of periods 5, interest rate 6% = 0.74726 Future value of $1 – number of periods 5, interest rate 6% = 0.94340 Present value of an annuity of $1 – number of periods 5, interest rate 6% = 0.55839 Future value of an annuity of $1 – number of periods 5, interest rate 6% = 0.76000