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    How do you calculate future and present value of an annuity with compounding interest?

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    Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.)

    (a) What is the future value of $7,000 at the end of 5 periods at 8% compounded interest?
    (b) What is the present value of $7,000 due 8 periods hence, discounted at 11%?
    (c) What is the future value of 15 periodic payments of $7,000 each made at the end of each period and compounded at 10%?
    (d) What is the present value of $7,000 to be received at the end of each of 20 periods, discounted at 5% compound interest?

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    Solution Preview

    See attached file.

    Computation of Future values
    Using the appropriate interest table, answer
    each of the following questions. (Each case is independent of the others.)
    (a) What is the future value of $7,000 at the end of 5 periods at 8% compounded interest?

    FV = PV (1+i)n where PV is the present value
    FV is the future value
    i is the interest rate
    n is the period

    FV = 7,000(1 ...

    Solution Summary

    This solution shows the formulas and calculations for each scenario, formatted in an attached Word document.

    $2.19

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