Marshall, McManus, & Viele text

Ch. 6, problem P6-26 a, b, c, and d only

Present value calculations. Using a present value table, your calculator, or a computer

program present value function, answer the following questions:

Required:

a. What is the present value of nine annual cash payments of $4,000, to be paid

at the end of each year using an interest rate of 6%?

b. What is the present value of $15,000 to be paid at the end of 20 years, using

an interest rate of 18%?

c. How much cash must be deposited in a savings account as a single amount

in order to accumulate $300,000 at the end of 12 years, assuming that the

account will earn 10% interest?

d. How much cash must be deposited in a savings account (as a single amount)

in order to accumulate $50,000 at the end of seven years, assuming that the

account will earn 12% interest?

Ch. 6, problem P6-26 a, b, c, and d only

Present value calculations. Using a present value table, your calculator, or a computer

program present value function, answer the following questions:

Required:

a. What is the present value of nine annual cash payments of $4,000, to be paid

at the end of each year using an interest rate of 6%?

b. What is the present value of $15,000 to be paid at the end of 20 years, using

an interest rate of 18%?

c. How much cash must be deposited in a savings account as a single amount

in order to accumulate $300,000 at the end of 12 years, assuming that the

account will earn 10% interest?

d. How much cash must be deposited in a savings account (as a single amount)

in order to accumulate $50,000 at the end of seven years, assuming that the

account will earn 12% interest?

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