What is the future worth of the following seriesof payments?(a) $75,000 at the end of each six-month period forten years at 10.2% compounded semi-annually.(b) $25,000 at the end of each quarter for twelveyears at 9.2% compounded quarterly.(c) $22,000 at the end of each month for eight yearsat 8.4% compounded monthly

What is the future worth of the following seriesof payments?(a) $75,000 at the end of each six-month period forten years at 10.2% compounded semi-annually.(b) $25,000 at the end of each quarter for twelveyears at 9.2% compounded quarterly.(c) $22,000 at the end of each month for eight yearsat 8.4% compounded monthly

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 5P

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

What is the future worth of the following series
of payments?
(a) $75,000 at the end of each six-month period for
ten years at 10.2% compounded semi-annually.
(b) $25,000 at the end of each quarter for twelve
years at 9.2% compounded quarterly.
(c) $22,000 at the end of each month for eight years
at 8.4% compounded monthly

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