The future value is $1,500 due in 14 years at a 5% interest rate and 10% interest rate. Present value is the current value of future investment or series of future payments at a predetermined interest rate for a specified period. P V = F V ( 1 + r ) n Here, The present value is “ PV ”. The future value is “ FV ”. The interest rate is “ r ”. The maturity period of time period is “ n ”.

Question

Want to see the full answer?

Answer 1

Question

Chapter 4, Problem 5PROB

Summary Introduction

The future value is $1,500 due in 14 years at a 5% interest rate and 10% interest rate.

Present value is the current value of future investment or series of future payments at a predetermined interest rate for a specified period.

PV=FV(1+r)n

Here,

The present value is “PV”.

The future value is “FV”.

The interest rate is “r”.

The maturity period of time period is “n”.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

National Bank currently has $500 million in transaction deposits on its balance sheet. The current reserve requirement is 10 percent, but the Federal Reserve is decreasing this requirement to 8 percent. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only 50 percent of these funds to National Bank as transaction deposits. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts 75 percent of its excess reserves to loans and borrowers return 60 percent of these funds to National Bank as transaction deposits.

The FOMC has instructed the FRBNY Trading Desk to purchase $500 million in U.S. Treasury securities. The Federal Reserve has currently set the reserve requirement at 5 percent of transaction deposits. Assume U.S. banks withdraw all excess reserves and give out loans. What is the full effect of this purchase on bank deposits and the money supply if borrowers return only 95 percent of these funds to their banks in the form of transaction deposits?

Don't used Ai solution