PRESENT VALUES Using the appropriate tables in the text, Required:

Determine:

a. the present value of a single $14,000 cash flow in seven years if the interest

(discount) rate is 8 percent per year.

b. the number of periods for which $5,820 must be invested at an annual interest

(discount) rate of 7 percent to produce an investment balance of $10,000.

c. the size of the annual cash flow for a 25-year annuity with a present value of

$49,113 and an annual interest rate of 9 percent. One payment is made at the end of each year.

d. the annual interest rate at which an investment of $2,542 will provide for a single

$4,000 cash flow in four years.

e. the annual interest rate earned by an annuity that costs $17,119 and provides 15 payments of $2,000 each, one at the end of each of the next 15 years.

Exercise