Time Value of Money II

# Time Value of Money II - Time Value of Money II Discounting...

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Time Value of Money II - Discounting Lump Sums_x000D_McLaughlin's "Fun with Finance" Brief Case Series A. [5] What is the value today of \$500 received ten years from now at 10%? r = 10% 10y PV=? FV=\$500 PV=FV x PVIF FV=500 x 0.3855 FV= \$192.75 B. [5] What is the value today of \$500 received ten years from now at 20%? r = 20% 10y PV=? FV=\$500 FV=PV x PVIF FV=500 x 0.1615 FV= \$80.75 C. [10] What is the value today of \$500 received twenty years from now at 10%? r = 10% 20y PV=? FV=\$500 FV=PV x PVIF FV=500 x 0.1486 FV= \$74.30 D. [10] What is the value today of \$500 received twenty years from now at 20%? r = 20% 20y PV=? FV=\$500 FV=PV x PVIF FV=500 x 0.0261 FV= \$13.05 The Cal Poly Pomona investment company, "Gotta Have It Now" wants to lend  you money today based on what you are expecting to receive in the future.  Compute the following using either your business caluclator with the tables

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## This note was uploaded on 04/27/2009 for the course FRL 301 taught by Professor Carney during the Spring '08 term at Cal Poly Pomona.

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Time Value of Money II - Time Value of Money II Discounting...

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