Future value If you deposit $2,000 in a bank account that pays 5% interest annua

Question

Future value If you deposit $2,000 in a bank account that pays 5% interest annually, how much Would be in your account after 5 years? Round your answer to the nearest cent $ Problem Walk-ThroughProblem Walk-ThroughProblem Walk-ThroughProblem Walk- ThroughProblem Walk-ThroughProblem Walk-Through Problem Walk-Through Problem Walk-ThroughProblem Walk-ThroughProblem Walk-ThroughProblem Walk-Through Present value What is the present value of a security that will pay $10,000 in 20 years if securities of equal risk pay 8% annually? Round your answer to the nearest cent. $ Finding the required interest rate Your parents will retire in 17 years. They currently have $220,000, and they think they will need $1,750,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places. % Time to reach a financial goal You have $15,196.65 in a brokerage account, and you plan to deposit an additional $3,000 at the end of every future year until your account totals $240,000. You expect to earn 14% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places at the end of the calculations. Years Future value: annuity versus annuity due a. What's the future value of a 9%, 5-year ordinary annuity that pays S500 each year? Round your answer to the nearest cent. $

Explanation / Answer

P 5-1) 2000 (1 + 0.05)5 = 2000 * 1.2763 = $2552.60

P 5-2) Present value of $10000 in 20 Years at 8% discount rate = $10000 * PVIF(8%,5YRS)

= $10000 * 0.215 = $2150

P 5-3) Rate of Interest = 220000 (1 + r)17 = 1750000

=> (1 + r)17 = 7.9545

Now taking log of both side, => 17 log (1 + r) = 0.9006

= 1 + r = Antilog ( 0.9006 / 17)

Thus, r = 1.129 - 1 = 0.129 or 12.90%

P 5-5) Not getting correct answer.

P 5-6) a.

Future value of $500 every year for 5 year at 9% interest rate = $500 * FVIF (9%, 5YRS) = $500 * 5.985 = $2992.50

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