Why does money have a time value?
Answer to relevant QuestionsAdjust the annual formula for a future value of a single amount at 12 percent for 10 years to a semiannual compounding formula. What are the interest factors (FVIF) before and after? Why are they different?You will receive $6,800 three years from now. The discount rate is 10 percent.a. What is the value of your investment two years from now? Multiply $6,800 × .909 (one year’s discount rate at 10 percent).b. What is the ...If you invest $8,500 per period for the following number of periods, how much would you have?a. 12 years at 10 percent.b. 50 years at 9 percent.Al Rosen invests $25,000 in a mint condition 1952 Mickey Mantle Topps baseball card. He expects the card to increase in value 12 percent per year for the next 10 years. How much will his card be worth after 10 years?What is the present value of a 10-year annuity of $3,000 per period in which payments come at the beginning of each period? The interest rate is 12 percent.
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