1
TVM Practice Set Using the Factors in the Tables: FV (Exhibit C
2), FVA (Exhibit C4), PV (Exhibit C6), and PVA (Exhibit C7).
Set One are computational problems. Set Two are word
problems. The answers to these practice problems are found
after the problems.
Set One:
1. What is the FV of $400,000 invested at 7% for 19 years?
2. What is the FV of $300 invested at 10%, compounded semi
annually, for 8 years?
3. What is the FV of $2,500 invested at 16% compounded
quarterly for 5 years?
4. What is the FVA at the end of 8 years of $4,000 per year for 8
years invested at 8%?
5.
The FV of an annuity is $10,000. Assume 14 payments are
made at the end of each of the fourteen years and the rate of
return is 8%, how much are the payments?
6. What is the PV of $6,500 received 10 years from now,
assuming a 10% interest rate?
7.
What is the PV of $6,500 received 1 year from now assuming
a 12% interest rate?
8.
What is the PVA of $20,000 per year for 17 years assuming
an interest rate of 14%?
9.
What is the annuity payment if the PV of the 16 year annuity
is $40,000 and the interest rate is 5%?
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
2
10.
What would the payment be for a loan of $15,000 if the
interest rate is 16% and the payments are quarterly for 20
months or 5 quarters?
11.
What would the payment be for a loan of $15,000 if the
interest rate is 12% and the payments are annually for
sixteen years?
12. What is the NPV of the following cash flows assuming an
interest (discount) rate of 4%?
Year
Cash Flow
0
$150,000
1
40,000
2
40,000
3
40,000
4
40,000
13. Find the NPV of the following cash flows assuming a
discount rate of 6%
Year
Cash Flow
0
$250,000
1
150,000
2
60,000
3
75,000
Set Two:
1.
Your grandfather would like to share some of his fortune
with you. He offers to give you money under one of the
This is the end of the preview.
Sign up
to
access the rest of the document.
 Spring '10
 Osterheld
 Net Present Value, PVA factor

Click to edit the document details