Explanation Formula used: To find the present value : “The present value is obtained by the formula, P V = F V ( 1 + R ) N , where PV is present value, FV is future value, R is interest rate per compounding period and N is total number of compounding periods.” Calculation: Calculate the amount which yields a future value of $6,999 in 1 year at 8.3% rate of interest as follows. Here the values of FV , R and N are F V = 6 , 999 , R = 0.083 1 = 0.083 and N = 1 ( 1 ) = 1 . Substitute the values of FV , R and N in the present value formula and calculate the present value as follows

MML F/COLLEGE MAT F/TRADES - ACCESS CODE

10th Edition

ISBN: 9781323845967

Author: Hobbs

Publisher: PEARSON

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Chapter 16.1, Problem 23E

To determine

The amount out of $10,000 that Shirley Riddle set aside to obtain a future value of $6,999 in 1 year at rate of interest of 8.3%.

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Chapter 16.1, Problem 22E

Chapter 16.1, Problem 24E

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Chapter 16 Solutions

MML F/COLLEGE MAT F/TRADES - ACCESS CODE

Ch. 16.1 - Prob. 1LC Ch. 16.1 - Prob. 1E Ch. 16.1 - Prob. 2E Ch. 16.1 - Prob. 3E Ch. 16.1 - Prob. 4E Ch. 16.1 - Prob. 5E Ch. 16.1 - Prob. 6E Ch. 16.1 - Prob. 7E Ch. 16.1 - Prob. 8E Ch. 16.1 - Prob. 9E

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