Question

4. Put the calculated values below on the time scale. a. P = 500 (P/A, 10%,5) b. F = 500(F/A, 10%,5) A = $500 0 1 2 3 4 5 6 7

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Answer #1

a. P = 500 *(P/A, 10%,5) = 500 * 3.790787 = 1895.39

CFD

Cash flow 2,000.00 1,800.00 1,600.00 1,400.00 1,200.00 1,000.00 Cash flow 800.00 600.00 400.00 200.00 0.00 0 1 2 3 4 5 6 78 9

b. F = 500 * (F/A, 10%,5) = 500 * 6.105100 = 3052.55

CFD

4,000.00 3,500.00 3,000.00 2,500.00 | Future worth 2,000.00 | Cash flow 1,500.00 1,000.00 500.00 0.00 0 1 2 34 5 6 7 8

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