future value of annuity, present value of a security
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4.1 If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years?
4.2 What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually?
4.6 What is the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If this were an annuity due, what would its future value be?
4.13 Find the present value of the following ordinary annuities
A. $400 per year for 10 years at 10%
B. $200 per year for 5 years at 5%
C. $400 per year for 5 years at 0%
D. Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.
4.14 Find the present values of the following cash flow streams. The appropriate interest rate is 8%
Year Cash Stream A Cash Stream B
1 $100 $300
2 400 400
3 400 400
4 400 400
5 300 100
B. What is the value of each cash flow stream at a 0% interest rate?
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Solution Summary
Your tutorial is in Excel and uses the table factors to show you the responses needed. On 4.14 you are shown both the table factors and the excel NPV function to find the same amount.
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See the tables attached.
Your tutorial is in Excel and uses the table ...
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
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