Compute the future value of the following deposits made today: a. $10,000 at 6.75% compounding annually for 10 years b. $10,000 at 6.75% compounding quarterly for 10 years c. $10,000 at 6.75% compounding monthly for 10 years

Compute the future value of the following deposits made today: a. $10,000 at 6.75% compounding annually for 10 years b. $10,000 at 6.75% compounding quarterly for 10 years c. $10,000 at 6.75% compounding monthly for 10 years

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Compute the future value of the following deposits
made today:
a. $10,000 at 6.75% compounding annually for
10
years
b. $10,000 at 6.75% compounding quarterly for
10 years
c. $10,000 at 6.75% compounding monthly for
10
years
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Present Value of an Annuity Determine the present value of $170,000 to be received at the end of each of four years, using an interest rate of 5.5%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. c. Why is the present value of the four $170,000 cash receipts less than the $680,000 to be received in the future? The present value is less due to over the 4 years. Exhibit 5 Present Value of $1 at Compound Interest Periods 4% 4%% 5% 5%% 6% 62% 7% 10% 11% 12% 13% 0.96154 0.956940 0.95238 0.94787 0.94340 0.93897 0.93458 0.90909 0.90090 0.89286 0.88496 2 0.92456 0.915730 0.90703 0.89845 0.89000 0.88166 0.87344 0.82645 0.81162 0.79719 0.78315 3 0.88900 0.876300 0.86384 0.85161 0.83962 0.82785 0.81630 0.75131 0.73119 0.71178…
Calculate the future value in six years of $8,000 received today if your investments pay for the following interest rates. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Future Value 5 percent compounded annually b. 7 percent compounded annually c. 9 percent compounded annually d. 9 percent compounded semiannually 9 percent compounded quarterly а. $ 6,268.21 е.
Present Value of an Annuity Determine the present value of $310,000 to be received at the end of each of four years, using an interest rate of 6%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year $fill in the blank 1 Second Year fill in the blank 2 Third Year fill in the blank 3 Fourth Year fill in the blank 4 Total present value $fill in the blank 5 b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar.$fill in the blank 6 c. Why is the present value of the four $310,000 cash receipts less than the $1,240,000 to be received in the future?The present value is less due to..........................over the 4 years.
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Calculate the future value of the following single amounts. Initial Investment Annual Rate Interest Compounded Period Invested 1. $8,000 10% Annually 7 years 2. 6,000 12 Semiannually 4 years 3. 9,000 8 Quarterly 3 years
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