Question: Is the answer for Present Value correct? PROBLEM 1 Find the following values for a lump sum: - The future value of $500 invested at

Is the answer for Present Value correct?

PROBLEM 1
Find the following values for a lump sum:
- The future value of $500 invested at 8 percent for one year
- The future value of $500 invested at 8 percent for five years
- The present value of $500 to be received in one year when the opportunity cost rate is 8 percent
- The present value of $500 to be received in five years when the opportunity cost rate is 8 percent
assuming:
a. Annual compounding
b. Semiannual compounding

c. Quarterly compounding

Present Value
Annual Compounding
N 1 PV 1 yr= $462.96 N 5 PV 5 yr= $1,996.36
I 8.0% I 8.0%
PMT 500 PMT 500
Semiannual Compounding
N 2 PV 1 yr = $891.63 N 10 PV 5 yr = $3,355.04
I 8.0% I 8.0%
PMT 500 PMT 500
Quarterly Compounding
N 4 PV 1 yr = $1,656.06 N 20 PV 5 yr = $4,909.07
I 8.0% I 8.0%
PMT 500 PMT 500

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