value if the investment is made for two years.
FV one year
FV two years
Sum of FV's
Find the future value of $10,000 invested now after five years if the annual interest rate is 8 percent.
a. What would be the future value if the interest rate is a simple interest rate?
FV using simple interest
b. What would be the future value if the interest rate is a compound interest rate?
FV using compound interest
Prob 9-5 Find the present value of $7,000 to be received one year from now assuming a 3 percent annual discount interest rate. Also calculate
the present value if the $7,000 is received after two years.
PV received one year from now
PV received two years from now
Prob 9-10 Determine the present value now of an investment of $3,000 made one year from now and an additional $3,000 made two years
from now if the annual discount rate is 4 percent.
PV one year from now
PV two years from now
Prob 9-20 Use a financial calculator or computer software program to answer the following questions.
a. What is the present value of $359,000 that is to be received at the end of twenty-three years, the discount rate is 11 percent,
and semiannual discounting occurs?
PV w/ semi-annual discounting
b. How would your answer for (a) change if monthly discounting were used?
PV w/ monthly discounting
The way to answer this question is ... View the full answer