Determine the value of a $2,000 deposit made on January 1,2014 on December 31,20

Question

Determine the value of a $2,000 deposit made on January 1,2014 on December 31,2016 if the bank compounds interest annually. Compute the value of an amount of money on January 1,2014 if its future value is $5,000 on December 31,2016 and interest compounds semiannually. Calculate the value of a $1,000 annuity on December 31,2016 if the firm makes annual deposits on December 31,2014, December 31,2015, and December 31,2016. Determine the value on January 1, 2014 of $500 annuity payments made on each June 30 and December 31 from 2014 through 2016.

Explanation / Answer

1 FV =PV (1+r)n FV = 2000(1+.06)3 2000*1.19 Future Value = $ 2380 2 5000= PV (1+.06/2)3*2 5000= PV *1.20 Present Value = $ 4167 3

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