Explore BrainMass
Share

# Present Value/compound interest

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

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 \$

#### Solution Preview

(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

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

(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

View Full Posting Details