FIN3403 WORKSHEET#3 TVM/INTEREST RATE COMPOUNDING (20PTS) NAME: ______________________________________________________________________ TIME VALUE OF MONEY - SINGLE AMOUNT/LUMP SUM 1. (1pt) What is the future value of $2,000 deposited today in a savings account earning 10% interest compounded annually in 5 years? TVM Variable Amount Present Value PMT Periods Interest Rate Future Value 2. (1pt) What is the amount of compound interest you have earned? 3. (1pt) What is the amount of simple interest you have earned? 4. (1pt) What is the amount of interest on interest you have earned? 5. (1pt) Carla Lopez is trying to save enough to have $500,000 for retirement in 25 years. She has an account that earns 10% compounded annually. What amount should she deposit as a single amount today to meet her goal? TVM Variable Amount Present Value PMT Periods Interest Rate Future Value 6. (1pt) If you were offered $15,000 in 10 years for a deposit of $6,500 today, what would be the interest rate you woul