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# Calculate PV, FV, PMT

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The following situations involve the application of the time value of money concept.
1. Janelle Carter deposited \$9,750 in the bank on January 1, 1991, at an interest rate of 11% compounded annually. How much has accumulated in the account by January 1, 2008?
2. Mike Smith deposited \$21,600 in the bank on January 1, 1998. On January 2, 2008, this deposit has accumulated to \$42,487. Interest is compounded annually on the account. What rate of interest did Mike earn on the deposit?
3. Lee Spony made a deposit in the bank on January 1, 2001. The bank pays interest at a rate of 8% compounded annually. On January 1, 2008, the deposit has accumulated to \$15,000. How much money did Lee originally deposit on January1, 2001?
4. Nancy Holmes deposited \$5,800 in the bank on January 1 a few years ago.. The bank pays an interest of 10% compounded annually, and the deposit is now worth \$15,026. How years has the deposit been invested?

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Time Value of Money:
Calculate - 1. Future Value; 2. Present Value; 3. ...

#### Solution Summary

The following situations involve the application of the time value of money concept.
1. Janelle Carter deposited \$9,750 in the bank on January 1, 1991, at an interest rate of 11% compounded annually. How much has accumulated in the account by January 1, 2008?
2. Mike Smith deposited \$21,600 in the bank on January 1, 1998. On January 2, 2008, this deposit has accumulated to \$42,487. Interest is compounded annually on the account. What rate of interest did Mike earn on the deposit?
3. Lee Spony made a deposit in the bank on January 1, 2001. The bank pays interest at a rate of 8% compounded annually. On January 1, 2008, the deposit has accumulated to \$15,000. How much money did Lee originally deposit on January1, 2001?
4. Nancy Holmes deposited \$5,800 in the bank on January 1 a few years ago.. The bank pays an interest of 10% compounded annually, and the deposit is now worth \$15,026. How years has the deposit been invested?

\$2.19
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## Calculate the present value of \$100,000 in the given cases

Using the present value function in MS Excel, verify that the present value of \$100,000 to be received in five years at an interest rate of 16%, compounded annually, is \$47,610. Calculate the present value of \$100,000 for each of the following items (parts a-f) using these facts:

a. Interest is compounded semiannually
b. Interest is compounded quarterly
c. A discount rate of 12% is used
d. A discount rate of 20% is used
e. The cash will be received in three years
f. The cash will be received in seven years

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