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ID: 2568523 • Letter: 1
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14 Lia com/ilrn/takeAssignment/takeAssignmentMain.do?invoker-assignments&takeAssignmentSessionLocator; ass Using the present value tables, solve the following. (Cick here to access the time value of monay tables to use with this problem.) Round your anwers to two decimal places Requireds 1. What is the present value on January . 2016, of $30,000 due on lanuary 1. 2020, and discounted at 1 compounded temannul 2. What is the present valu. on January 1, 2016. e40.000 due on January is 2020, and discounted at its 3. What is the present value on 3anuary : 2016 of $50.000 de on Janusry 1., 2020, and dacounted at 16Explanation / Answer
compounded interest formula (Future value = Present value(1+r/n)nt
r= rate of interest
n= no of times interest is compounded every year
nt = no of years
1
Annual compounding
Future value = 30,000*(1+10%/1)4
Future value as on Jan 1st 2020= $43,923
2
semi Annual compounding
Future value = 40,000*(1+11%/2)4
Future value as on Jan 1st 2020= $61,387.46
3
Quarterly compounding
Future value = 50,000*(1+16%/4)4
Future value as on Jan 1st 2020= $93,649
compounded interest formula (Future value = Present value(1+r/n)nt
r= rate of interest
n= no of times interest is compounded every year
nt = no of years
1
Annual compounding
Future value = 30,000*(1+10%/1)4
Future value as on Jan 1st 2020= $43,923
2
semi Annual compounding
Future value = 40,000*(1+11%/2)4
Future value as on Jan 1st 2020= $61,387.46
3
Quarterly compounding
Future value = 50,000*(1+16%/4)4
Future value as on Jan 1st 2020= $93,649
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