A. to what ammount will the following investment accumulate $5,000 invested for

Question

A. to what ammount will the following investment accumulate $5,000 invested for 10 years at 10 percent compounded annually

B. What is the present value of the folloing future ammount? $800 to be received 10 years from now discounted back to the present at 10 peercent

C. What is he accumulated sum of following stream of payment? $500 a year for 10 years compounded annually at 5 percent

D. What is the present value of the following annuity? $2,500 a year for 10 years dicounted back to the present at 7 percent

Explanation / Answer

A. 5,000( 1+.10)^10= 12,968.71 B. 800/(1.10)^10= 308.43. C. Formula is A= R((1+i)^n-1)/i A= 500*((1.05)^10-1)/.05= 6,288.95 D. Formula is A=R (1-(1+i)^(-n))/i A= 2,500*(1-1.07^(-10))/.10= 12,291.27

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