Question

EC-7 Computing Missing Present or Future Values involving Single Amounts or Annuities 

Each of the following situations is independent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided.)

Compute the missing amounts for (i) through (iv). (Round your answers to nearest hundred dollars.)

Answer 1

note: here the factor value are used upto three places after decimal. I can’t see how many places after decimal is used in the question posted. Because of this reason the final answer may be different by very little amount due to the factors value used by me and that used in the question.

(A)

future value = present value x FVF

= $170000 x 1.316

= $223,720

where,

FVF(4%, 7) = 1.316

(B)

present value = future value x PVF

= $170000 x 0.746

= $126,820

where,

PVF(5%, 6) = 0.746

(C)

present value of annuity = annuity x PVAF

= $3400 x 8.530

= $29,002

where,

PVAF(3%, 10) = 8.530

(D)

future value of annuity = annuity x FVAF

= $4400 x 29.778

= $131,023

where,

FVAF(4%, 20) = 29.778