Time value of money
Not what you're looking for?
Please assist with the following homework:
1.Calculate the future value of the following
a, $500 invested for 5 yrs at a 5 % interest rate
b. $700 invested for 3 years at a 2 % interest rate
c. $1200 if invested for 7 years at an 11 % interest rate
d. $400 if invested for 10 years with an 0 % interest rate
CALCULATE THE PRESENT VALUE OF THE FOLLOWING
a. $2400 to be received 3 years from now with a 4% discount rate
b. $900 to be received 5 years from now with a 10% interest rate
c. $1100 to be received 2 years from now with a 24% interest rate
d. $45,000 to be received 8 years from now with a 7 % interest rate
e. Suppose you to are receive a stream of annual payments(also called annuity) of $7000 every year for 3 years starting this year. The discount rate is 6 % .What is the present value of these payments
f. Suppose you are to receive a payment of $4000 every year for 3 years.You are depositing these payments in a bank account that pays 3 % interest.Given these 3 payments and this interest rate, how much will be in your account in 3 years.
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation to calculate the future value and present value for the given amount.
Solution Preview
1.Calculate the future value of the following
a, $500 invested for 5 yrs at a 5 % interest rate
FV = PV (1+i)n where PV is the present value
FV is the future value
i is the interest rate
n is the period
FV = 500(1 + 0.05)5
= 638.14
b. $700 invested for 3 years at a 2 % interest rate
FV = 700(1 + 0.02)2
= 742.85
c. $1200 if invested for 7 years at an 11 % interest rate
FV = 1,200(1 + 0.11)7
= 2,491.39
d. $400 if invested for 10 years with an 0 % interest rate
FV = 400(1 + 0.0)10
= 400
CALCULATE ...
Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.