FOUNDATION OF FINANCIAL MANAGEMENT CHAPTER 9

# FOUNDATION OF FINANCIAL MANAGEMENT CHAPTER 9 - due to...

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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....
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FOUNDATION OF FINANCIAL MANAGEMENT CHAPTER 9 - due to...

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