Question

1. For each of the following, compute the Future Value. Show your work. Present Value Years Interest Rate Future Value 2,175 12 13% 6,850 7 10% 81,350 14 12% 195,050 10 8% 2. For each of the following compute the Present Value. Show your work %

Answer 1

Answer: 1) We have to compute the future value * Formula → Future Value = 'Present value * {1+r)" where, r- interest rate, no time period 1 for, 2,176,12,13 % Fva pv * [1+r]" = $2,175 *[1 +0:13] = $, 175 [1-13712 FV = $ 9427.59 2] for, 6,850 , 1 , 1014. Fr= Pv * [tran - $6850 x [1 +0.10] - $6.850 x [1-177 FV = $ 13348.71 14 3] for, 81,350,14,12'16 fv = $ 81,350 x [1 +0:12] = $ 81.350 x [1.12]4 FV = $ 397; 56658

41195,050 ,10,8% → Fv = pv x[1 +0.087° = $195,050 < [1.08)" = $ 421098.32 FV - $ 4,21098.32 Present value Years Interest rare Future rare 9.427.59 13. 21115 6,850 10%. 81,350 13.348.11 397,566.58 421,098,32 195,050 8% a) Now we have to find the present Value. # formula - present Value = future value ! [1+1]" O for 13 , 104, 16,500 => present value = future value / (1+1]" = 15,500 / (1+0.1073 = 15,500/E10] - 15,500/ 3.452271 $ 4,489.80 DV = $41489.80

2) for 4,8%, 51,555 present value = future value 1 (1+0% = 51555[1+0.0874 = 519555 | (1.0814 - 51,555 1.36048896 = $37,894.46 pre $31,894046 3) for 29 241.886072 present value = future value 1 (1+0)" = 886,012 1617 024729 = 886,0741-24729 = 886,074) 511,951559 = $. , 730.77 DV - $ 1,730.77 4 Fox 40,35 , 550,165 present value: future value 1(+ 550, 165) (1+0.35)40 = 550,165/(1:35)4 = 550,165/ 163,437115 = $3.36 PV = $ 3.36

present value I years Interest Rate future value. $4,489-90 10% 15,500 $31,894.46 51555 $ 1,730.77 24.1. 886,012 550,165 $ 3:36 35.1. - Xo