This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: due to rounding. Appendix B PV = FV × PVIF $5,000 x .794 = $3,970 (n = 3, %i = 8) 4. If you invest $9,000 today, how much will you have: FV = PV × FVIF a. In 2 years at 9 percent? $9,000 × 1.188 = $ 10,692 (n = 2, %i = 9) b. In 7 years at 12 percent? $9,000 × 2.211 = $ 19,899 (n = 7, %i = 12) c. In 25 years at 14 percent? $9,000 × 26.462 = $238,158 (n = 25, %i = 14) d. In 25 years at 14 percent (compounded semiannually)? $9,000 × 29.457 = $265,113 (n = 50, %i = 7) 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 / (1.12) 50 = $104 I should choose $30,000 in 50 years because it has higher present value than $95 today....
View
Full Document
 Spring '11
 acc101
 Net Present Value, Elementary arithmetic, Capital accumulation, Mathematical finance

Click to edit the document details