Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value. To identify: the interest rate column and number of period.

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Answer 1

Question

Chapter B, Problem 1QS

Summary Introduction

Concept Introduction:

Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value.

To identify: the interest rate column and number of period.

Expert Solution & Answer

Explanation of Solution

Rate	Interest rate	Number of period
12% annual rate, compounded annually	12%	1	The compounding is annual, hence the rate shall remain same and period shall be 1.
6% annual rate, compounded semiannually	3%	2	The compounding is semiannual, hence the rate shall be half and period shall be double.
8% annual rate, compounded quarterly	2%	4	The compounding is quarterly, hence the rate shall be one fourth and period shall be four times.
12% annual rate, compounded monthly	1%	12	The compounding is monthly, hence the rate shall be divided by 12 and period shall be multiplied by 12.

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Answer 2

Question

Chapter B, Problem 1QS

Summary Introduction

Concept Introduction:

Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value.

To identify: the interest rate column and number of period.

Expert Solution & Answer

Explanation of Solution

Rate	Interest rate	Number of period
12% annual rate, compounded annually	12%	1	The compounding is annual, hence the rate shall remain same and period shall be 1.
6% annual rate, compounded semiannually	3%	2	The compounding is semiannual, hence the rate shall be half and period shall be double.
8% annual rate, compounded quarterly	2%	4	The compounding is quarterly, hence the rate shall be one fourth and period shall be four times.
12% annual rate, compounded monthly	1%	12	The compounding is monthly, hence the rate shall be divided by 12 and period shall be multiplied by 12.

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Answer 3

Question

Chapter B, Problem 1QS

Summary Introduction

Concept Introduction:

Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value.

To identify: the interest rate column and number of period.

Expert Solution & Answer

Explanation of Solution

Rate	Interest rate	Number of period
12% annual rate, compounded annually	12%	1	The compounding is annual, hence the rate shall remain same and period shall be 1.
6% annual rate, compounded semiannually	3%	2	The compounding is semiannual, hence the rate shall be half and period shall be double.
8% annual rate, compounded quarterly	2%	4	The compounding is quarterly, hence the rate shall be one fourth and period shall be four times.
12% annual rate, compounded monthly	1%	12	The compounding is monthly, hence the rate shall be divided by 12 and period shall be multiplied by 12.

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Answer 4

Question

Chapter B, Problem 1QS

Summary Introduction

Concept Introduction:

Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value.

To identify: the interest rate column and number of period.

Expert Solution & Answer

Explanation of Solution

Rate	Interest rate	Number of period
12% annual rate, compounded annually	12%	1	The compounding is annual, hence the rate shall remain same and period shall be 1.
6% annual rate, compounded semiannually	3%	2	The compounding is semiannual, hence the rate shall be half and period shall be double.
8% annual rate, compounded quarterly	2%	4	The compounding is quarterly, hence the rate shall be one fourth and period shall be four times.
12% annual rate, compounded monthly	1%	12	The compounding is monthly, hence the rate shall be divided by 12 and period shall be multiplied by 12.

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Answer 5

Chapter B, Problem 1QS

Summary Introduction

Concept Introduction:

Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value.

To identify: the interest rate column and number of period.

Expert Solution & Answer

Explanation of Solution

Rate	Interest rate	Number of period
12% annual rate, compounded annually	12%	1	The compounding is annual, hence the rate shall remain same and period shall be 1.
6% annual rate, compounded semiannually	3%	2	The compounding is semiannual, hence the rate shall be half and period shall be double.
8% annual rate, compounded quarterly	2%	4	The compounding is quarterly, hence the rate shall be one fourth and period shall be four times.
12% annual rate, compounded monthly	1%	12	The compounding is monthly, hence the rate shall be divided by 12 and period shall be multiplied by 12.

Answer 6

Chapter B, Problem 1QS

Summary Introduction

Concept Introduction:

Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value.

To identify: the interest rate column and number of period.

Expert Solution & Answer

Explanation of Solution

Rate	Interest rate	Number of period
12% annual rate, compounded annually	12%	1	The compounding is annual, hence the rate shall remain same and period shall be 1.
6% annual rate, compounded semiannually	3%	2	The compounding is semiannual, hence the rate shall be half and period shall be double.
8% annual rate, compounded quarterly	2%	4	The compounding is quarterly, hence the rate shall be one fourth and period shall be four times.
12% annual rate, compounded monthly	1%	12	The compounding is monthly, hence the rate shall be divided by 12 and period shall be multiplied by 12.

Answer 7

Chapter B, Problem 1QS

Summary Introduction

Concept Introduction:

Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value.

To identify: the interest rate column and number of period.

Answer 8

Expert Solution & Answer

Explanation of Solution

Rate	Interest rate	Number of period
12% annual rate, compounded annually	12%	1	The compounding is annual, hence the rate shall remain same and period shall be 1.
6% annual rate, compounded semiannually	3%	2	The compounding is semiannual, hence the rate shall be half and period shall be double.
8% annual rate, compounded quarterly	2%	4	The compounding is quarterly, hence the rate shall be one fourth and period shall be four times.
12% annual rate, compounded monthly	1%	12	The compounding is monthly, hence the rate shall be divided by 12 and period shall be multiplied by 12.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. B - Prob. 1QS Ch. B - Prob. 2QS Ch. B - Prob. 3QS Ch. B - Prob. 4QS Ch. B - Prob. 5QS Ch. B - Prob. 6QS Ch. B - Prob. 7QS Ch. B - Prob. 1E Ch. B - Prob. 2E Ch. B - Prob. 3E

Explanation of Solution

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Chapter B Solutions