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Calculate the compound interest for the following:

$10,000 invested for 10 years at 10% compounded annually

$4,000 invested for 7 years at 8% compounded annually

Calculate the present value for the following:

$400 to be received 10 years from now discounted back to the present at 10%

$600 to be received 5 years from now discounted back to the present at 5%

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Solution Preview

(1) P = 10000, r = 10% = 0.10, t = 10

A = P(1 + r)^t

A = 10000(1 + 0.10)^10 = $25937.42

CI = A - ...

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