5-1A (Compound interest) To what amount will thefollowing investments accumulate

Question

5-1A (Compound interest) To what amount will thefollowing investments accumulate? a. $5,000 invested for 10 years at 10 percent compoundedannually b. $8,000 invested for 7 yearss at 8 percent compoundedannually c. $775 invested for 12 years at 12 percent compoundedannuually d. $21,000 invested for 5 years at 5 percent compoundedannually 5-4A (Present value) What is the present value of the followingfuture amounts? a. $800 to be received 10 years from now discounted back tothe present at 10 percent b. $300 to be received 5 years from now discounted back ot thepresent 5 percent c. $1,000 to be received 8 years from now discounted back tothe present at 3 percent d. $1,000 to be received 8years from no discounted back to thepresent at 20 percent 5-5A (Compound annuity) What is the accumulated sum of each of htefollowing streams of payments a. $500 a year for 10 years compounded annully at 5percent b.$100 a year for 5 years compounded annually at 10percent c. $35 a year for 7 years compounded annually at 7percent d. $25 ayear for 3 years compounded annually at 2percent 5-1A (Compound interest) To what amount will thefollowing investments accumulate? a. $5,000 invested for 10 years at 10 percent compoundedannually b. $8,000 invested for 7 yearss at 8 percent compoundedannually c. $775 invested for 12 years at 12 percent compoundedannuually d. $21,000 invested for 5 years at 5 percent compoundedannually 5-4A (Present value) What is the present value of the followingfuture amounts? a. $800 to be received 10 years from now discounted back tothe present at 10 percent b. $300 to be received 5 years from now discounted back ot thepresent 5 percent c. $1,000 to be received 8 years from now discounted back tothe present at 3 percent d. $1,000 to be received 8years from no discounted back to thepresent at 20 percent 5-5A (Compound annuity) What is the accumulated sum of each of htefollowing streams of payments a. $500 a year for 10 years compounded annully at 5percent b.$100 a year for 5 years compounded annually at 10percent c. $35 a year for 7 years compounded annually at 7percent d. $25 ayear for 3 years compounded annually at 2percent

Explanation / Answer

5-1A)

a)

Future value = present value ( 1 + r)n

Future value = 5,000 * ( 1 + 0.1)10

Future value = 5,000 * 2.593742

Future value = $12,968.7123

b)

Future value = 8,000 * ( 1 + 0.8)7

Future value = $13,710.59415

c)

Future value = 775 * ( 1 + 0.12)12

Future value = $3,019.381394

d)

Future value = 21,000 * ( 1 + 0.05)5

Future value = $26,801.91281

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