Finance Ch 5- - Future Value(FV $560 10.78 8 $1,284 $810 19.48 9 $4,341 $18,400 15.67 21 $364,518 $21,500 17.08 13 $173,439 Equation FV = PV(1 r t

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Finance 100.1 Chapter 5 Problems 4-6 Presented by Group 6
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Problem 4 Calculating Interest Rates Present Value  (PV) Years Interest Rate Future Value  (FV) $240 2 $307 $360 10 $896 $39,000 15 $174,384 $38,261 30 $483,500
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Problem 4 Continued Present Value  (PV) Years Interest Rate Future Value  (FV) $240 2 13.10% $307 $360 10 9.55% $896 $39,000 15 10.50% $174,384 $38,261 30 8.82% $483,500 Equations: FV=PV(1+r) t    OR %CAGR = (FV/PV) 1/t - 1 Solution: R = ($307/$240) 1/2 - 1      = 1.279166667 ½ - 1 = 0.131002505           = 0.131002505 x 100  = 13.1002505 R= 13.10%  
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Problem 5 Calculating the Number of Periods Present Value  (PV) Years Interest Rate Future Value  (FV) $560 8% $1,284 $810 9% $4,341 $18,400 21% $364,518 $21,500 13% $173,439
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Problem 5 Continued Present Value  (PV) Years Interest Rate
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Unformatted text preview: Future Value (FV) $560 10.78 8% $1,284 $810 19.48 9% $4,341 $18,400 15.67 21% $364,518 $21,500 17.08 13% $173,439 Equation: FV = PV(1+r) t Or T = In(FV/PV) In (1 + r) Solution: T = In($1,284/$560) In(1+.08) = .8297987 .076961041 = 10.7820618 T = 10.78 years Problem 6 Calculating Interest Rates Given: • College Education will cost $280,000. • Currently have $50,000. • Years until you need the money, 18. Problem 6 Calculating Interest Equations: FV=PV(1+r) t OR %CAGR = (FV/PV) 1/t - 1 Solution: R = ($280,000/$50,000) 1/18-1 = 5.6 1/18-1 = 0.10043907 = 0.10043907 x 100 = 10.043907 R= 10.04%...
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This note was uploaded on 03/30/2008 for the course H P A 447 taught by Professor Graupensperger,ti during the Spring '08 term at Pennsylvania State University, University Park.

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Finance Ch 5- - Future Value(FV $560 10.78 8 $1,284 $810 19.48 9 $4,341 $18,400 15.67 21 $364,518 $21,500 17.08 13 $173,439 Equation FV = PV(1 r t

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