Question: Present Value and Future Value The following situations require the application of the time value of money: 1. On January 1, 2010, $16,000 is deposited.

Present Value and The following situations require the application of the time value of money:
1. On January 1, 2010, $16,000 is deposited. Assuming an 8% interest rate, calculate the amount accumulated on January 1, 2015, if interest is compounded
(a) Annually,
(b) Semiannually, and
(c) Quarterly.
2. Assume that a deposit made on January 1, 2010, earns 8% interest. The deposit plus interest accumulated to $20,000 on January 1, 2015. How much was invested on January 1, 2010, if interest was compounded
(a) Annually,
(b) Semiannually, and
(c) Quarterly?

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