PERSONAL FINANCE CHAPTER 1 CASE PROBLEM Directions Step 1: Using Appendix Exhibit 1-B (Future Value of a Series of Deposits), complete the following calculations. (Note: The first problem is correct and serves as an example. Also, note that $5,200 per year would be $100/week savings.) Annual Interest Time Table Investment Rate Investe Factor d Value at the End of Investment Period $26,362** $2,000 6% 10 13.181 $4,000 $4,000 5% 5% years 5 years 10 years 10 years 8 years $4,000 9% $1,000 $5,000 8% 6% 9 years 213 States Annual Interest Time Table Value at the Investment Rate Investe Factor End of d Investment Period $2,000 6% 10 13.181 $26,362** years $4,000 5% 5 years $4,000 5% 10 years $4,000 9% 10 years $1,000 8% 8 years $5,000 6% 9 years $5,200 6% 1 year $5,200 6% $5,200 6% 10 years $5,200 6% 20 years $5,200 6% 30 years S5,200 6% 40 years $5,200 6% 50 years * Thinkin ni Fr. 60/ -in olan 5 years years $5,200 6% 50 years * The table Factor is for 6% and 10 years and is taken from (Time Value of Money) Exhibit 1-B on page 42. **The Value at the End of Investment Period is $26,362 ($2,000 x 13.181). Step 2: Answer the following question (one page or less). 1. Based on your answers, what effect do interest rates have on the value of an investment? 2. Based on your answers, what effect does the time factor have on the value of an investment? 3. Now that you have worked through these calculations, what thoughts are being triggered as far as your own financial planning is concerned