What is the present value of each of the following single amounts: $10,000 to be
ID: 2615631 • Letter: W
Question
What is the present value of each of the following single amounts: $10,000 to be received in 10 years at 8% compounded annually $10,000 to be received in ho years at 6% compounded annually? $10,000 to be received in 15 years at 8% compounded annually? $10,000 to be received in 15 years at 6% compounded annually, a. b. c- - 2. What is the future value of a single amount of a. S2,000 invested for 10 years at 5% compounded annually? b, $2,000 invested for 10 years at 8% compounded annually? c. $2,000 invested for 15 years at 5% compounded annually? d. S2,000 invested for 15 years at 8% compounded an!tually? 3. What is the future value of an amount of: $2,000 invested each year for 25 years a t 5% compounded annually?-- - - - a. b. S2 ,000 invested each year for 25 years at 8% compounded annually?Explanation / Answer
Question 1
Present Value = Future Value / (1+rate of return)no.of periods
a) Present Value = 10,000 / (1+.08)10
= $4631.93
b) Present Value = 10,000 / (1+.06)10
= $5583.94
c) Present Value = 10,000 / (1+.08)15
= $3152.41
d) Present Value = 10,000 / (1+.06)15
= $4172.65
Question 2
Future Value = Present Value * (1+rate of return)no.of periods
a) Future Value = 2000 * (1+.05)10
= $3257.79
b) Future Value = 2000 * (1+.08)10
= $4317.85
c) Future Value = 2000 * (1+.05)15
= $4157.86
d) Future Value = 2000 * (1+.08)15
= $6344.34
Question 3
Future value of Annuity = A [((1+r)n-1) / r]
Where
A - Annuity payment
r - rate per period
n - no. of periods
a) Future value of Annuity = 2000 [((1+.05)25-1) / .05]
= $95,454.12
b) Future value of Annuity = 2000 [((1+.08)25-1) / .08]
= $146,211.81
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.