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Capstone Checkpoint

# Capstone Checkpoint - c There may be a slight difference...

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Capstone Checkpoint: Present Value, Future Value, and Annuity Due Christy Thornton FIN/200 June 25, 2010 Mernoush Banton

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Unformatted text preview: c. There may be a slight difference due to rounding. \$5,000 x .794 = \$3,970 4. If you invest \$9,000 today, how much will you have: a. In 2 years at 9 percent? \$9,000 x 1.188 = \$10,692 b. In 7 years at 12 percent? \$9,000 x 2.211 = \$19,899 c. In 25 years at 14 percent? \$9,000 x 26.462 = \$238,158 d. In 25 years at 14 percent (compounded semiannually)? (n= 25 x 2 = 50) (i= 14/2 = 7%) 50 x 29.457 = \$216,113 5. Your uncle offers you a choice of \$30,000 in 50 years or \$95 today. If money is discounted at 12 percent, which should you choose? \$30,000 x .003 = \$90. I would go with \$95 today, because it has a higher present value than \$30,000 in 50 years....
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Capstone Checkpoint - c There may be a slight difference...

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