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    Compound interest , present value, future values

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    Please complete the following calculations showing all work.

    *Compound Interest - what amount will the following investments accumulate?

    1) $5,000 invested for 10 yrs at 10% compounded annually

    2). $8,000 invested for 7 yrs at 8% compounded annually

    3). $775 invested for 12 years at 12% compounded annually

    4). $21,000 invested for 5 years at 5% compounded annually

    *Present value - what is the present value of the following future amounts?

    1). $800 to be received 10 yrs from now discounted back to the present at 10%

    2). $300 to be received 5yrs from now discounted back to the prseent at 5%

    3). $1,000 to be received 8 yrs from now discounted back to the present at 3%

    4) $1,000 to be recieved 8 yrs from now discounted back to the present at 20%

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    https://brainmass.com/business/the-time-value-of-money/191220

    Solution Preview

    Please see attached file for answers:

    Note: the abbreviations have the following meanings

    PVIF= Present Value Interest Factor
    FVIF= Future Value Interest Factor

    They can be read from tables or calculated using the following equations
    PVIF( n, r%)= =1/(1+r%)^n
    FVIF( n, r%)= =(1+r%)^n

    *Compound Interest - what amount will the following investments accumulate?

    1) $5,000 invested for 10 yrs at 10% compounded annually

    n= 10 years
    r= 10.00% per annum
    FVIF (10 periods, 10.% rate ) = 2.593742

    Present value= $5,000
    Therefore, future ...

    Solution Summary

    The solution calculates
    1) the amount at a future date, given interest rates and the number of years
    2) present value of a future amount using the process of discounting

    $2.49

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