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Present and Future Values with Varying Interest Rates

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If the interest rate this year is 7.2% and the interest rate next year will be 9.2%, what is the future value of $1 after 2 years? What is the present value of a payment of $1 to be received in 2 years? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

Future value $

Present value $

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Solution Summary

This solution illustrates how to compute the present and future values of $1 if interest rates change each year using formulas.

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