AWerner_Module02ApplicationOfFutureValueAndPresentValue_101517.xlsx

AWerner_Module02ApplicationOfFutureValueAndPresentValue_101517.xlsx

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Unformatted text preview: Module 02 Written Assignment - Application of Future Value and Present Value Complete problems 1 and 2 below. 1. Calculate the future value in ten years of $2,000 received today if your investments pay: a6 percent compounded annually Rate Nper PMT PV FV 6% 10 $0.00 ($2,000.00) $3,581.70 b8 percent compounded annually Rate Nper PMT PV FV 8% 10 $0.00 ($2,000.00) $4,317.85 c10 percent compounded annually Rate Nper PMT PV FV 10% 10 $0.00 ($2,000.00) $5,187.48 d10 percent compounded semiannually Rate Nper PMT PV FV 10% 20 $0.00 ($2,000.00) $13,455.00 e10 percent compounded quarterly Rate Nper PMT PV FV 10% 40 $0.00 ($2,000.00) $90,518.51 2. What is the relationship between future values and interest rates and future values and the n "The future value (FV) measures the nominal future sum of money that a given sum of money is 'worth' at rate, or more generally, rate of return" (Boundless Finance, 2017). The higher the interest rate is, the h number of periods increase, FV also increases" (Boundless Fin "The future value (FV) measures the nominal future sum of money that a given sum of money is 'worth' at rate, or more generally, rate of return" (Boundless Finance, 2017). The higher the interest rate is, the h number of periods increase, FV also increases" (Boundless Fin Boundless Finance. (2017). The Relationship Between Present and Future Values. Retrieved from r investments pay: future values and the number of compounding periods per year? n sum of money is 'worth' at a specified time in the future assuming a certain interest er the interest rate is, the higher the future value will be. "As the interest rate and so increases" (Boundless Finance, 2017). s. Retrieved from il-on-present-and-future-values/ Module 02 Written Assignment - Application of Future Value and Present Value Complete problems 1 and 2 below. 1. Calculate the present value in ten years of $2,000 received today if your investments pay: a6 percent compounded annually Rate Nper PMT FV PV 6% 10 $0.00 $3,581.70 ($2,000.00) b8 percent compounded annually Rate Nper PMT FV PV 8% 10 $0.00 $4,317.85 ($2,000.00) c10 percent compounded annually Rate Nper PMT FV PV 10% 10 $0.00 $5,187.48 ($2,000.00) d10 percent compounded semiannually Rate Nper PMT FV PV 10% 20 $0.00 $13,455.00 ($2,000.00) e10 percent compounded quarterly Rate Nper PMT FV PV 10% 40 $0.00 $90,518.51 ($2,000.00) 2. What is the relationship between present values and interest rates and present values and Present Value is "a future amount of money that has been discounted to reflect its current value, as if the relationship between PVs and interest rates are that of the same as FVs. "PV and FV vary directly: interest rate and number of periods remain constant" (Boundless Finance, 2017). When it comes to t compounding periods per year, increases in interest rates and numb Boundless Finance. (2017). The Relationship Between Present and Future Values. Retrieved from https: our investments pay: nd present values and the number of compounding periods per year? t its current value, as if it existed today" (Boundless Finance, 2017). Because of that, PV and FV vary directly: when one increases, the other increases, assuming that the 017). When it comes to the relationship between present values and the number of nterest rates and number of periods, decreases PV. s. Retrieved from il-on-present-and-future-values/ ...
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