Q2:
PV = FV / (1+r)^n
r is int rate per anum and n is time period
PV = FV / (1+r)^n
= $ 12,500 / (1+0.08)^10
= $ 12,500 / (1.08)^10
= $ 12,500 / 2.1589
= $ 5789.92
Q3:
FV = PV(1+r)^n
r is rate of Ret required and n is time period
= $ 10,000 * (1+0.12)^10
= $ 10,000 * (1.12)^10
= $ 10,000 * 3.1058
= $ 31,058.48
Q4:
PV = FV / (1+r)^n
r is int rate per month and n is no.of Months
PV = FV / (1+r)^n
= $ 875 / (1+0.0133)^32
= $ 875 / (1.0133)^32
= $ 875 / 1.5278
= $ 572.71
2) What is the present value of $12.500 to be received 10 years from today? Assume...
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