Question: Present Value: PV = FV / (1+r)^t Future Value: FV = PV(1+r)^t Using the Present and Future Value formulas above, calculate the following 1)

Present Value: PV = FV / (1+r)^t Future Value: FV = PV(1+r)^t

Present Value: PV = FV / (1+r)^t Future Value: FV = PV(1+r)^t Using the Present and Future Value formulas above, calculate the following 1) What is the Future Value (FV) of $300 if invested at annual rate of 7% for 5 years? 2) What is the Present Value (PV) of receiving $10,000 in 8 years if the annual interest rate is 4%? 3) You want to buy a car in four years and need $6,000 as a down payment. If you can earn 5% annually in a savings account, how much do you have to put in the savings account today? 4) You have $7,000 to put in a savings account that earns an annual rate of 5%, how much money will you have in the account after three years?

Step by Step Solution

★★★★★

3.46 Rating (159 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Solution ii it Present Wahee guterest Future Vahere ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Using Decision Matrices You want to buy a low-cost laptop for your college work and consider price the most important feature. Your Task. Study Figure and change the weights in Table 2 to reflect...

If you borrow $5,000 to buy a car at 6% compounded monthly, to be repaid over the next five years, what is your monthly payment? (a) $81.7 (b) $96.5 (c) $112 (d) $89 (e) $104

You are trying to buy a car and your favorite car dealer is offering you a great car lease deal. The car lease is based on 40% of the car price to be paid in 36 months. The residual, or the other...

Various Inventory Issues The following independent situations relate to inventory accounting. 1. Kim Co. purchased goods with a list price of $175,000, subject to trade discounts of 20% and 10%, with...

Luke Corporation produces a variety of products, each within their own division. Last year, the managers at Luke developed and began marketing a new chewing gum, Bubbs, to sell in vending machines....

1. If you want to buy a $350,000 lathe to improve your shop, and you currently have $200K that you can invest at 8.5% compounded monthly, how long do you have to wait until you can afford the...

The accelerating seek described in Exercise 14.3 is typical of hard-disk drives. By contrast, floppy disks (and many hard disks manufactured before the mid-1980s) typically seek at a fixed rate....

The usefulness of budgets, variances, and related analyses often depends on the accuracy of managements estimates of future sales activity. Required 1. Identify and record the prior three years sales...

Helium expands in a nozzle from 1 MPa, 500 K, and negligible velocity to 0.1 MPa. Calculate the throat and exit areas for a mass flow rate of 0.25 kg/s, assuming the nozzle is isentropic. Why must...

A 10-mm-thick work piece, initially at 25C, is to be annealed at a temperature above 725C for a period of at least 5 minutes and then cooled. The work piece is opaque and diffuse, and the spectral...

A shareholder purchases 30 percent of the stock of an S corporation two-thirds of the way through the year for $20,000. The S corporation incurs an operating loss of $300,000 for the year. What is...

The recording of operations (and includes the entries of regularization and closing), the preparation of the financial statements and performance analysis using ratios Carole and Alain Plante start...

13. Some insurance companies are not humanitarian organizations. Th erefore, some humanitarian organizations are not insurance companies. Use conversion, obversion, and contraposition to determine...

Air Canada is Canada's largest airline and the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. transborder market and in the international market to and from...

Zeus Ltd owns 100% of the issued capital of Ares Ltd. On 1 July 2015, Zeus Ltd purchased an item of equipment from Ares Ltd for $800 000. Ares had owned the equipment for 2 years. It originally cost...

1 What are the major issue and the minor issues of this case? 2 How to analyze them in a financial accounting report? Muskoka Limited Muskoka Limited (Muskoka) has been in the snowmobile custom...

An REA diagram depicts the following agent entities: purchasing agent, receiving dock employee, cashier, inventory custodian, and suppliers. How many tables are needed to represent this REA diagram...

Prior to beginning work on this assignment, review the following through the Growing Your Business simulation, the Strategy video available in the Supplementary Review Materials through the Help...

3.- La asociacin de egresados de la universidad est trabajando para formular una propuesta relativa a la consecucin de una sede en el rea de la universidad. Se tiene un total de 3600 egresados...

formula's given Moving to another question will save this response. Question 6 You are given the information below to answer questions that follow: a. Jones PLC started Year-2020 with AED5,000,000 in...

formula's given Moving to another question will save this response estion 9 A. Ayesha jume wants to buy a Bugatti Verona car. The car wil.com er 100.000 How much erst comedy movies You are given...

Compute Present Value (PV) FV: $0 PMT: Year1: $ 500 Year 2: 350 Year 3: 100 Year 4: 0 Year 5: 620 RATE: 2.50% Years: 5 Compounded: Annually

See page 129- 137 on attachment for more details there are five steps to the project. Step 1: Create the loan amortization schedule for the property. Step 2: Create the depreciation schedule. Step 3:...

The data has been collected in the spreadsheet below. Reference the spreadsheet and perform the required analysis to answer ALL FOUR PARTS of the question below (PARTS G, H, I, AND J). Do not round...

wy Can the nine Cabling them f davan 1425 CAUTION Cipe mare P Tematy L wees wha HAUGE S Sheet! $4000 dive for Am F Forma Fre KAR Fy Par ( Part 193 Formal 1111 1111 20111 1 Time value of money Finding...