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3131_TVM_Examples[1]

# 3131_TVM_Examples[1] - 3131 Chapter 6 Examples 1 \$1000 is...

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3131 Chapter 6 Examples 1. \$1000 is put on deposit today to earn 6% compounded annually. What is the value of this investment at the end of 8 years? 1593.85 2. If you wish to be able to withdraw the sum of \$8000 at the end of 12 years how much do you have to deposit today (assuming interest is compounded annually at 6%)? 3975.76 3. If \$400 is put in a savings account at the end of each year for 5 years, how much will you have at the end of 5 years (assuming 6% interest compounded annually)? 2254.84 4. If \$400 is put in a savings account at the beginning of each year for 5 years, how much will you have at the end of 5 years (assuming 6% interest compounded annually)? 2390.13 5. What dollar amount today is equivalent to receiving \$1000 10 years from now using a 7% interest rate (compounded annually)? ? 6. What is the future value of an ordinary annuity of \$100 per period for 6 years at 7% compounded annually? 715.35 7. What amount can be withdrawn at the end of each period for 5 years if \$1000 is deposited now and all deposits earn 6% compounded annually.

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