Question

Exercise 6-3 Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.)

Click here to view factor tables What is the future value of $8,160 at the end of 7 periods at 8% compounded interest? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) The future value $enter the future value in dollars rounded to 0 decimal places LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO VIDEO

Click here to view factor tables What is the present value of $8,160 due 6 periods hence, discounted at 6%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) The present value $enter the present value in dollars rounded to 0 decimal places LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO VIDEO

Click here to view factor tables What is the future value of 16 periodic payments of $8,160 each made at the end of each period and compounded at 10%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) The future value $enter the future value in dollars rounded to 0 decimal places LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO VIDEO

Click here to view factor tables What is the present value of $8,160 to be received at the end of each of 20 periods, discounted at 5% compound interest? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) The present value $enter the present value in dollars rounded to 0 decimal places

Answer 1

solution 1:

Future value = $8,160 * (1+0.08)^7 = $8,160 * 1.71382 = $13,985

Solution 2:

Present value = $8,160 * PV factor at 6% for 6th period

= $8,160 * 0.70496 = $5,752

Solution 3:

Future value = $8,160 * Cumulative FV factor at 10% for 16 periods

= $8,160 * 35.94973 = $293,350

Solution 4:

Present value = $8,160 * Cumulative PV factor at 5% for 20 periods

= $8,160 * 12.46221 = $101,692