{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Time Value of Money - Practice Midterm I

# Time Value of Money - Practice Midterm I - Practice...

This preview shows pages 1–2. Sign up to view the full content.

Practice Examination Midterm I r = 6% y = 22 PV = 5,000 FV = ? FV = PV x FVIF FV = 5,000 x 3.6035 FV =  \$18,017.50 r = 12% y = 22 PV = 5,000 FV = ? FV = PV x FVIF FV = 5,000 x 12.100 FV =  \$60,500.00 No, because they are exponential, not linear. r = 14% y = ? PV = 7,500 FV = 90,420 FV = PV x FVIF 90,420 = 7,500 x FVIF FVIF = 90,420/7,500 FVIF = 12.06 Take look the Table Y = 19 r = ? y = 30 PV = 8,350 FV =250,000 FV = PV x FVIF 8,350 = 25,000 x FVIF Take look the Table FVIF = 29.94 r = 12% 1. [10] Draw the time line and solve for what \$5,000 would be worth 22 years  from now if you could earn 6% interest. 2. [10] Draw the time line and solve for what \$5,000 would be worth 22 years  from now is your could earn 12% interest. 3. [20] Is your answer to question 2 double your answer to question 1? Would  you expect it to be since the only difference between the two problems is that  the interest rate has doubled?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 2

Time Value of Money - Practice Midterm I - Practice...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online