1. The present worth of an amount of money X that will be received 6 years from

Question

1. The present worth of an amount of money X that will be received 6 years from now is $2,000. At an interest rate of 10% per year, the value of X ten years from now is closest to:
a: 5190

b: less then 5000

c: more than 7000

d: 6320

2. It is expected that an investment of P at time 0 to provide an income of $1,000 every year for the next 12 years. If the investor expects to have a rate of return of 9% per year, what is the value of P?

a $4,266

b $8,921
c $7,161

d $9,322

3. Two sets of cash flows are shown in the table below. If these sets are equal at 8% interest rate, determine the unknown value, X.

4. A series of end -of -the -year cash flows of $2,000 for ten years at an annual interest rate of 8% is nearly equal to a series of end -of -the -year cash flows at 10% interest for eight years. Determine the value of the uniform amount, A.

5. Twelve deposits of $1,000 are made at the end of every quarter at an interest rate of 10% compounded quarterly and another deposit of $2,000 is made every six- months at an interest rate of 12% for three years.

i. What is the total accumulation a person would have after three years?

6. Given the cash flow diagram, determine the unknown for an interest rate of 9%

7. what are the relationships for compound intrest factors

The present worth of an amount of money X that will be received 6 years from now is $2,000. At an interest rate of 10% per year, the value of X ten years from now is closest to: It is expected that an investment of P at time 0 to provide an income of $1,000 every year for the next 12 years. If the investor expects to have a rate of return of 9% per year, what is the value of P? Two sets of cash flows are shown in the table below. If these sets are equal at 8% interest rate, determine the unknown value, X. A series of end -of -the -year cash flows of $2,000 for ten years at an annual interest rate of 8% is nearly equal to a series of end -of -the -year cash flows at 10% interest for eight years. Determine the value of the uniform amount, A. Twelve deposits of $1,000 are made at the end of every quarter at an interest rate of 10% compounded quarterly and another deposit of $2,000 is made every six- months at an interest rate of 12% for three years. What is the total accumulation a person would have after three years? Given the cash flow diagram, determine the unknown for an interest rate of 9% what are the relationships for compound interest factors

Explanation / Answer

1. a)

2000*1.1^10 = $5190

2. c)

PV of all the future cash flow = 1000*PVIFA(9,12) = 1000*7.1607 = 7160.7

value of P = $7161

3.

4.

2000*PVIFA(8,10) = A*PVIFA(10, 8)

2000*6.7101 = A*5.3349

value of uniform amount, A = 13420.2/5.3349 = $2515.54

5.

Amount accumulated from 1st deposit = 1000*FVIFA(10/4,12) = 1000*FVIFA(2.5,12) = 1000*13.7956 = 13795.6

Amount accumulated from 2nd deposit = 2000*FVIFA(6,6) = 2000*6.9753 = $13950.6

Total accumulated amount = 13795.6+13950.6 = 27746.2

6.

7.

Compound amount factor = 1/ Present worth factor

capital recovery factor = 1/present worth factor

compund amount factor = 1/ sinkind fund factor

sum = principle*(1+rate/100)^n where n is no of time period

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.