Exercise B$-19($Algo$)$ Using present and future value tables LO C$1,$ P$1,$

P$2,$ P$3,$ P$4$

For each of the following situations, identify $(1)$ the case as either $($a$)$ a present or a future

value and $($b$)$ a single amount or an annuity, $(2)$ the table you would use in your computations

$($but do not solve the problem$),$ and $(3)$ the interest rate and time periods you would use. $($PV

of $$1,FV$ of $$1,$PVA of $$1,$ and FVA of $$1)$

Note: Use appropriate factor$($s$)$ from the tables provided. Round "Table Factors" to $4$

decimal places.

a$.$ You need to accumulate $$11,600$ for a trip you wish to take in four years. You are able to

earn $10\%$ compounded semiannually on your savings. You plan to make only one deposit

and let the money accumulate for four years. How would you determine the amount of the

one$-$time deposit?

b$.$ Assume the same facts as in part $($a$)$ except that you will make semiannual deposits to

your savings account. What is the required amount of each semiannual deposit?

You want to retire after working $40$ years with savings in excess of $$1,320,000.$ You expect

to save $$5,280$ a year for $40$ years and earn an annual rate of interest of $10\%.$

c$-2.$ Will you be able to retire with more than $$1,320,000$ in $40$ years?

d$-1.$ A sweepstakes agency names you a grand prize winner. You can take $$297,000$

immediately or elect to receive annual installments of $$33,200$ for $20$ years. You can earn

$12\%$ annually on any investments you make.

d$-2.$ Which prize do you choose to receive?

Complete this question by entering your answers in the tabs below.

Will you be able to retire with more than $$1,320,000$ in $40$ years?