PRESENT AND FUTURE VALUES FOR DIFFERENT INTEREST RATES

Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent.

a. An initial $400 compounded for 10 years at 5%.

$

b. An initial $400 compounded for 10 years at 10%.

$

c. The present value of $400 due in 10 year at 5%.

$

d. The present value of $2,040 due in 10 years at 10%.

$

e. The present value of $2,040 due in 10 years at 5%.

$

Define present value.

1. The present value is the value today of a sum of money to be received in the future and in general is less than the future value.
2. The present value is the value today of a sum of money to be received in the future and in general is greater than the future value.
3. The present value is the value today of a sum of money to be received in the future and in general is equal to the future value.
4. The present value is the value in the future of a sum of money to be received today and in general is less than the future value.
5. The present value is the value in the future of a sum of money to be received today and in general is greater than the future value.