Finance:

PRESENT VALUE

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Present Value | 327 NAME: SCORE: SECTION: PROFESSOR: Problem #1 PRESENT VALUE finding the Present Value (Principal) and the Compound Interest Using the Table Compound Term of Nominal Interest Present Compound Amount Investment Rate Compounded Value Interest 60,000 3 years 9% annually 6,500 5 years 8% quarterly 500,000 25 years 10.5% annually 98,000 4 years 12% quarterly 2,500 1 year 18% monthly Note: Round answers to the nearest cent.Creating the New Table Factor and Finding the Present Value Principal Term of Nominal ' Interest New Table Present Investment Rate compounded Factor Value ii 120,000 30 years 16% quarterly 3' 14,000 28 years 12% qliarteriy 4' 1,10,000 55 years . 8% semiannually 5' ' 13300 17 years 12% monthly l 330:00'3 52 years 7% annually Problem #2 PRESENT VALUE Finding the Present Value (Principal) and the Compound Interest Using the Formula Using the present value formula, solve the following: Compound Nominal Term of Interest Compound Amount Rate Loan Compounded Present Value Interest P 20,000 6% 10 years annually P 9,000 9% 4 years semi-annually P 3,500 8% 4 years quarterly P100,000 12% 2 years bi-monthly P 7,000 10% 30 years annually P 50,000 12% 7 years quarterlyward Problems 310 wants to ten - . 1' Aug ovate his house In 3 Years. He estimates the cost to be P300,000. How much must Angela;J invest now D _ ' have P300,000, 3 years from now, at 8 A" 'nterest compounded quarterly, in order to 2- Arnold and Azure want to save P5005000 in 5 12% years to renovate their rest house. If the Bank of Amoer is paying 8% interest compounded quarterly, how much must they depoSit now in order to have the money for the project? 3. Find the present value of P85,000, if the interest rate is 6% compounded quarterly, for 10 years. 4. Ashley and Aileen want to accumulate P300,000, 17 years from now, as a college fund for their baby daughter, Aria. Use the present value formula to calculate how much they must invest now, at an interest rate of 8% compounded semiannually, in order to have P300,000 in 17 3'63\"- . Anne is planning a vacation in Europe in 4 years, after graduation. She estimates that she will need P350,000 for the trip. (a) If her bank is offering 4-year certificates of deposit with 8% interest compounded quarterly, how much must Anne invest now in order to have the money for the trip? (b) How much compound interest will be earned on the investment? CS CamScanner 330 | Math in the Business World 0. Arney Arval estimates he will need P250,000 to set up a law office in 7 years, when he graduates from law school. (a) How much must Arney invest now at 12% interest compounded quarterly in order to achieve his goal? (b) How much compound interest will he earn on the investment?7. Find the present value of P140,000 due at the end of nine years if money is worth (a) 5% compounded quarterly and (b) 7% compounded semiannually. How much is the compound interest in each case? 8. Amethyst has P100,000 at the end of three years in her savings account. The interest rate is 24% compounded monthly. How much did she deposit in the account three years ago? 9. If P360,000 is due seven years from now and money is worth 5% compounded annually, find the present value and the compound interest. quarterly? 10. What principal will accumulate to P320,000 in four years at 4% compounded11. Arthur paid a two-year debt with P16,907.40. The interest charged was at 60 compounded monthly. What was the principal