a. The future value in two years of $11,500 invested today in a certificate of deposit with interest compounded annually at 10 percent. $Answer b. The present value of $13,000 to be received in five years, discounted at 8 percent. $Answer c. The present value of an annuity of $26,500 per year for four years discounted at 12 percent. $Answer
Time Value of Money: Basics
Using the equations and tables in Appendix 12A of this chapter, determine the answers to each of the following independent situations:
a. The future value in two years of $11,500 invested today in a certificate of deposit with interest compounded annually at 10 percent.
$Answer
b. The present value of $13,000 to be received in five years, discounted at 8 percent.
$Answer
c. The present value of an annuity of $26,500 per year for four years discounted at 12 percent.
$Answer
d. An initial investment of $48,220 is to be returned in six equal annual payments. Determine the amount of each payment if the interest rate is 16 percent.
$Answer
e. A proposed investment will provide
| Present Value | |
|---|---|
| Year 1 | Answer |
| Year 2 | Answer |
| Year 3 | Answer |
| Total | Answer |
f. Find the present value of an investment that will pay $13,000 at the end of Years 8, 9, and 10. Use a discount rate of 12 percent.
$Answer
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
