Present and future values for different interest rates Find the following values

Question

Present and future values for different interest rates

Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent.

An initial $500 compounded for 10 years at 7%.

$  

An initial $500 compounded for 10 years at 14%.

$  

The present value of $500 due in 10 year at a discount rate of 7%.

$  

The present value of $2,845 due in 10 years at 14%.

$  

The present value of $2,845 due in 10 years at 7%.

$  

Growth rates

Shalit Corporation's 2011 sales were $7 million. Its 2006 sales were $3.5 million.

At what rate have sales been growing? Round your answer to two decimal places.

%

Effective rate of interest

Find the interest rates earned on each of the following. Round each answer to two decimal places.

You borrow $650 and promise to pay back $728 at the end of 1 year.

%

You lend $650 and the borrower promises to pay you $728 at the end of 1 year.

%

You borrow $65,000 and promise to pay back $120,311 at the end of 8 years.

%

You borrow $16,000 and promise to make payments of $5,001.00 at the end of each year for 5 years.

%

Explanation / Answer

FV(500,10,7%)=1.967*500 983.5 FV(500,10,14%)=3.707*500 1853.5 PV(500,10,7%)=0.5083*500 254.15 PV(2845,10,14%)=0.2697*2845 767.30 PV(2845,10,7%)=0.5083*2845 1446.11 Groth=(7-3.5) 3.5 (1+r)^5=3.5 or (1+r)=(3.5)^(1/5) 1.285 or R=Growth Rate=(1.285-1)*100 28.5 Interest Rates Interest Rate=((728-650)/650)*100 12 Interest Rate=((728-650)/650)*100 12 Interest=((120311-65000)/65000)*100 85.09 Cash Flow -16000 B101 5001 B102 5001 B103 5001 B104 5001 B105 5001 B106 Interest Rate==IRR(B101:B106,0.01) 17% B107

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