# Question

Presented next are four independent situations related to future and present values.

Requirement

1. Using the tables in the appendix, calculate the future or present value of each item as needed.

a. $8,000 is deposited in the bank today for a period of six years. Calculate the value of the $8,000 at the end of six years assuming it earns 7% interest.

b. How much must you invest today in order to receive $3,000 at the end of each year for the next four years assuming you can earn 12% interest?

c. $4,500 will be invested at the end of each year for a period of three years.

Calculate the value of the investment at the end of three years assuming it earns 10% interest.

d. The company you work for wants to purchase a new piece of equipment that is estimated to cost $29,000 ten years from now. How much must they invest today in order to have the $29,000 necessary to purchase the equipment if they can earn 6% interest?

Requirement

1. Using the tables in the appendix, calculate the future or present value of each item as needed.

a. $8,000 is deposited in the bank today for a period of six years. Calculate the value of the $8,000 at the end of six years assuming it earns 7% interest.

b. How much must you invest today in order to receive $3,000 at the end of each year for the next four years assuming you can earn 12% interest?

c. $4,500 will be invested at the end of each year for a period of three years.

Calculate the value of the investment at the end of three years assuming it earns 10% interest.

d. The company you work for wants to purchase a new piece of equipment that is estimated to cost $29,000 ten years from now. How much must they invest today in order to have the $29,000 necessary to purchase the equipment if they can earn 6% interest?

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