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Present Value/compound interest

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The present value of $100,000 to be received in five years at an interest rate of 16%, compounded annually, is $47,610.

Required:
Using a present value table (Table 6-4 and Table 6-5), your calculator, or a computer program present value function, calculate the present value of $100,000 for each of the following items (parts aâ?"f) using these facts, except

(e)
The cash will be received in three years. (Round pv factor to 4 decimal places, and the final answer to nearest whole dollar amount. Omit the "$" sign in your response.

Present value $
(f)
The cash will be received in seven years. (Round pv factor to 4 decimal places, and the final answer to nearest whole dollar amount. Omit the "$" sign in your response.

Present value $

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(e) 
The cash will be received in three years. (Round pv factor to 4 decimal places, and the final answer to nearest whole ...

Solution Summary

Present Value/compound interest

$2.19
See Also This Related BrainMass Solution

Compounding Interest, Present Value, Compound Annuity, and PV of an Annuity Problem Set

***Please show work in how you arrived at the answers

(Compound interest) To what amount will the following investments accumulate?
a. $5,000 invested for 10 years at 10 percent compounded annually
b. $8,000 invested for 7 years at 8 percent compounded annually
c. $775 invested for 12 years at 12 percent compounded annually
d. $21,000 invested for 5 years at 5 percent compounded annually

(Present value) What is the present value of the following future amounts?
a. $800 to be received 10 years from now discounted back to the present at 10 percent
b. $300 to be received 5 years from now discounted back to the present at 5 percent
c. $1,000 to be received 8 years from now discounted back to the present at 3 percent
d. $1,000 to be received 8 years from now discounted back to the present at 20 percent

(Compound annuity) What is the accumulated sum of each of the following streams of
payments?
a. $500 a year for 10 years compounded annually at 5 percent
b. $100 a year for 5 years compounded annually at 10 percent
c. $35 a year for 7 years compounded annually at 7 percent
d. $25 a year for 3 years compounded annually at 2 percent

(Present value of an annuity) What is the present value of the following annuities?
a. $2,500 a year for 10 years discounted back to the present at 7 percent
b. $70 a year for 3 years discounted back to the present at 3 percent
c. $280 a year for 7 years discounted back to the present at 6 percent
d. $500 a year for 10 years discounted back to the present at 10 percent

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