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Future Value Interest Rate Number of Periods Present Value $713.00 $88,677.00 3.5% ? 6.5% 34 ? $349,058.00 11.5% 26 ? $25,474.44 17.5% 16

Future Value Interest Rate Number of Periods Present Value $713.00 $88,677.00 3.5% ? 6.5% 34 ? $349,058.00 11.5% 26 ? $25,474.44 17.5% 16

Essentials Of Investments
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
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## Data Table The table below displays financial data useful for calculating the present value of future cash flows given specific interest rates and time periods. This data is often used in financial mathematics and investment analysis. | Future Value | Interest Rate | Number of Periods | Present Value | |--------------|---------------|-------------------|---------------| | $713.00 | 3.5% | 5 | ? | | $88,677.00 | 6.5% | 34 | ? | | $349,058.00 | 11.5% | 26 | ? | | $25,474.44 | 17.5% | 16 | ? | ### Explanation - **Future Value:** The amount of money expected in the future. - **Interest Rate:** The percentage rate at which the money grows per period. - **Number of Periods:** The number of time periods (e.g., years) over which the money is invested or borrowed. - **Present Value:** The current worth of the future amount given the interest rate and number of periods. This value is often calculated using the formula: \[ \text{Present Value} = \frac{\text{Future Value}}{(1 + \text{Interest Rate})^{\text{Number of Periods}}} \] This table allows users to input data into a spreadsheet for further analysis and calculation of present values.
Transcribed Image Text:## Data Table The table below displays financial data useful for calculating the present value of future cash flows given specific interest rates and time periods. This data is often used in financial mathematics and investment analysis. | Future Value | Interest Rate | Number of Periods | Present Value | |--------------|---------------|-------------------|---------------| | $713.00 | 3.5% | 5 | ? | | $88,677.00 | 6.5% | 34 | ? | | $349,058.00 | 11.5% | 26 | ? | | $25,474.44 | 17.5% | 16 | ? | ### Explanation - **Future Value:** The amount of money expected in the future. - **Interest Rate:** The percentage rate at which the money grows per period. - **Number of Periods:** The number of time periods (e.g., years) over which the money is invested or borrowed. - **Present Value:** The current worth of the future amount given the interest rate and number of periods. This value is often calculated using the formula: \[ \text{Present Value} = \frac{\text{Future Value}}{(1 + \text{Interest Rate})^{\text{Number of Periods}}} \] This table allows users to input data into a spreadsheet for further analysis and calculation of present values.
**Present Values** Fill in the present values for the following table using one of the three methods below: a. Use the present value formula: \[ PV = FV \times \frac{1}{(1 + r)^n} \] b. Use the TVM keys from a calculator. c. Use the TVM function in a spreadsheet. | Future Value | Interest Rate | Number of Periods | Present Value | |---------------|---------------|-------------------|---------------------------------| | $713.00 | 3.5% | 5 | $__________ (Round to the nearest cent.) | | $88,677.00 | 6.5% | 34 | $__________ (Round to the nearest cent.) | | $349,058.00 | 11.5% | 26 | $__________ (Round to the nearest cent.) | | $25,474.44 | 17.5% | 16 | $__________ (Round to the nearest cent.) | **Instructions:** - Use the formula provided to calculate the present values for each row. - Enter the results in the "Present Value" column, rounding to the nearest cent. - Alternatively, calculate using a financial calculator or spreadsheet software.
Transcribed Image Text:**Present Values** Fill in the present values for the following table using one of the three methods below: a. Use the present value formula: \[ PV = FV \times \frac{1}{(1 + r)^n} \] b. Use the TVM keys from a calculator. c. Use the TVM function in a spreadsheet. | Future Value | Interest Rate | Number of Periods | Present Value | |---------------|---------------|-------------------|---------------------------------| | $713.00 | 3.5% | 5 | $__________ (Round to the nearest cent.) | | $88,677.00 | 6.5% | 34 | $__________ (Round to the nearest cent.) | | $349,058.00 | 11.5% | 26 | $__________ (Round to the nearest cent.) | | $25,474.44 | 17.5% | 16 | $__________ (Round to the nearest cent.) | **Instructions:** - Use the formula provided to calculate the present values for each row. - Enter the results in the "Present Value" column, rounding to the nearest cent. - Alternatively, calculate using a financial calculator or spreadsheet software.
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