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Unformatted text preview: 1 ( 9 9 = + = FV How long at 9 percent? Guess 8 years. 9 X 8 = 72 9926 . 1 ) 09 . 1 ( 8 8 = + = FV N i = 72 Where N is the number of years, and i is the interest rate, expressed as a whole percentage number. Perpetuities How much money would you need, earning 7 percent interest to collect $100 per year forever? .07 PV = 100 PV = 1428.57 Annuities How much would you need earning 7 percent, to collect $ 100 per year for 5 years? Perpetuity = 1428.57 Perpetuity delayed 5 years = 1428.57(.7130) =1018.57 PV of 5 year annuity = 1428.57 – 1018.57 = 410.00 Use of calculator N= 5 PMT = 100 FV=0 I=7 CPT PV = 410.02...
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 Spring '09
 NOWACKI
 Time Value Of Money, Future Value

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