Assume that you must estimate what the future value will be two years from today using the future value of 1 table (Table B.2). Which interest rate column and number-of-periods row do you use when working with the following rates?

1. 8% annual rate, compounded quarterly 2. 12% annual rate, compounded annually 3. 6% annual rate, compounded semiannually 4. 12% annual rate, compounded monthly (the answer for number-of-periods in part 4 is not shown in Table B.2)

Data from Table B-2

TABLE B.2†
Future Value of 1

Transcribed Image Text:

Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 0 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1 1.0100 1.0200 1.0300 1.0400 1.0500 1.0600 1.0700 1.0800 1.0900 1.1000 1.1200 1.1500 2 1.0201 1.0404 1.0609 1.0816 1.1025 1.1236 1.1449 1.1664 1.1881 1.2100 1.2544 1.3225 3 1.0303 1.0612 1.0927 1.1249 1.1576 1.1910 1.2250 1.2597 1.2950 1.3310 1.4049 1.5209 4 1.0406 1.0824 1.1255 1.1699 1.2155 1.2625 1.3108 1.3605 1.4116 1.4641 1.5735 1.7490 5 1.0510 1.1041 1.1593 1.2167 1.2763 1.3382 1.4026 1.4693 1.5386 1.6105 1.7623 20114 6 1.0615 1.1262 1.1941 1.2653 1.3401 1.4185 1.5007 1.5869 1.6771 1.7716 1.9738 2.3131 7 1.0721 1.1487 1.2299 1.3159 1.4071 1.5036 1.6058 1.7138 1.8280 1.9487 2.2107 2.6600 B 1.0829 1.1717 1.2668 1.3686 1.4775 1.5938 1.7182 1.8509 1.9926 2.1436 2.4760 3.0590 9 1.0937 1.1951 1.3048 1.4233 1.5513 1.6895 1.8385 1.9990 2.1719 2.3579 2.7731 3.5179 10 1.1046 1.2190 1.3439 1.4802 1.6289 1.7908 1.9672 21589 2.3674 2.5937 3.1058 4.0456 11 1.1157 1.2434 1.3842 1.5395 1.7103 1.8983 2.1049 2.3316 2.5804 28531 3.4785 4.6524 12 1.1268 1.2682 1.4258 1.6010 1.7959 2.0122 2.2522 2.5182 2.8127 3.1384 3.8960 5.3503 13 1.1381 1.2936 1.4685 1.6651 1.8856 2.1329 2.4098 2.7196 3.0658 3.4523 4.3635 6.1528 14 1.1495 1.3195 1.5126 1.9799 15 1.1610 16 1.1726 17 1.1843 1.4002 1.3459 1.5580 1.3728 1.6047 1.6528 2.0789 1.7317 1.8009 1.8730 2.1829 2.5404 1.9479 2.2920 2.2609 2.5785 29372 3.3417 3.7975 4.8871 7.0757 2.3966 2.7590 3.1722 3.6425 4.1772 5.4736 8.1371 2.9522 3.4259 3.9703 4.5950 6.1304 9.3576 2.6928 3.1588 3.7000 4.3276 5.0545 6.8660 10.7613 18 1.1961 1.4282 1.7024 20258 2.4066 2.8543 3.3799 3.9960 4.7171 5.5599 7.6900 12.3755 19 1.2081 1.4568 1.7535 2.1068 25270 3.0256 20 1.2202 1.4859 1.80611 2.1911 2.6533 25 1.2824 1.6406 2.0938 2.6658 3.3964 3.6165 4.3157 5.1417 3.2071 3.8697 4.6610 5.6044 4.2919 5.4274 6.1159 8.6128 14.2318 6.7275 9.6463 16.3665 6.8485 8.6231 10.8347 17.0001 32.9190 30 1.3478 1.8114 2.4273 3.2434 4.3219 5.7435 7.6123 10.0627 13.2677 17.4494 29.9599 66.2118 35 1.4166 1.9999 2.8139 3.9461 5.5160 7.6861 40 1.4889 2.2080 3.2620 4.8010 7.0400 10.2857 10.6766 14.9745 14.7853 20.4140 28.1024 21.7245 31.4094 45.2593 93.0510 52.7996 133.1755 267.8635