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Important information about Time Value of Money Questions

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Determine the amount that must be deposited now at compound interest to provide the desired sum for each of the following:

1. Amount to be invested for 10 years at 6% per annum, compounded semiannually, to equal $17,000.
2. Amount to be invested for 2 1/2 years at 8% per annum, compounded quarterly, to equal $5,000.
3. Amount to be invested for 15 years at 12% per annum, compounded semiannually, then reinvested at 16% per annum, compounded quarterly, for five more years to equal $25,000.
4. Amount to be invested at 8% per annum, compounded semiannually for three years, then $5,000 more added and the entire amount reinvested at the same rate for another three years, compounded semiannually, to equal $12,500.

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Solution Preview

Determine the amount that must be deposited now at compound interest to provide the desired sum for each for the following:

1. Amount to be invested for 10 years at 6% per annum, compounded semiannually, to equal $17,000.
2. Amount to be invested for 2 1/2 years at 8% per annum, compounded quarterly, to equal $5,000.
3. Amount to be invested for 15 years at 12% per annum, compounded semiannually, then reinvested at 16% per annum, compounded quarterly, for five more years to equal $25,000.
4. Amount to be invested at 8% per annum, compounded semiannually for ...

Solution Summary

Determines the amount that must be deposited now at compound interest to provide the desired sum.

$2.19