2.20. Calculate the future worth 5 years from now of a present sum of $2,000 if:...

 

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2.20. Calculate the future worth 5 years from now of a present sum of $2,000 if: (a) Annual interest is 10% compounded annually (b) Annual interest is 10% compounded quarterly (c) Annual interest is 10% compounded continuously 2.21. Calculate the present value of 10 uniform $2,000 payments if: (a) Annual interest is 10% compounded continuously and payments are received at the end of each year (b) Annual interest is 10% compounded continuously and payments are received contin- uously over the year 2.22. A gas station sells $125,000 worth of gasoline over the course of a year. If this revenue is collected and deposited continuously into an account that earns 8% interest, compounded annually, how much money would the station have in its account at the end of the year? 2.23. Develop an Excel® spreadsheet that computes the six functions — (P/A), (P/F), (F/A), (F/P), (A/P), (A/F) - for a fixed interest rate and the number of periods ranging from 1 to 100. 2.24. Use the Excel® NPER function to determine how long it will take for an investment to triple in value at interest rates of 1%, 5%, 10 %, 15%, 20%, and 25%. Can you determine an approximate "Rule" for how to quickly calculate how long it takes for an investment to triple in value? 2.20. Calculate the future worth 5 years from now of a present sum of $2,000 if: (a) Annual interest is 10% compounded annually (b) Annual interest is 10% compounded quarterly (c) Annual interest is 10% compounded continuously 2.21. Calculate the present value of 10 uniform $2,000 payments if: (a) Annual interest is 10% compounded continuously and payments are received at the end of each year (b) Annual interest is 10% compounded continuously and payments are received contin- uously over the year 2.22. A gas station sells $125,000 worth of gasoline over the course of a year. If this revenue is collected and deposited continuously into an account that earns 8% interest, compounded annually, how much money would the station have in its account at the end of the year? 2.23. Develop an Excel® spreadsheet that computes the six functions — (P/A), (P/F), (F/A), (F/P), (A/P), (A/F) - for a fixed interest rate and the number of periods ranging from 1 to 100. 2.24. Use the Excel® NPER function to determine how long it will take for an investment to triple in value at interest rates of 1%, 5%, 10 %, 15%, 20%, and 25%. Can you determine an approximate "Rule" for how to quickly calculate how long it takes for an investment to triple in value?

Answer rating: 100% (QA)

220 To calculate the future worth of a present sum we can use the future value formula a Annual interest is 10 compounded annually Future Worth Present Sum 1 Annual Interest RateNumber of Years Future ... View the full answer