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Homework Answers
| Picture 1 | |||||
| table function | present value= Future Value/ (1+i)^n | ||||
| Future value | 660000 | ||||
| n | 20 | ||||
| i | 8% | ||||
| Present value | 141601.8 | (660000/(1+.08)^20) | |||
| Picture 2 | |||||
| Table function | Present value= Annual payments[(1-(1+i)^-n)/i] | ||||
| Annuity payments | 25000 | ||||
| n | 20 | ||||
| i | 12% | ||||
| Present value | 186736.1 | {25000*(1-(1+0.12)^-20/0.12)} | |||
| Picture 3 | |||||
| Table function | Present value= Annual payments[(1-(1+i)^-n)/i] | ||||
| Annuity payments | 21000 | ||||
| n | 10 | ||||
| i | 8% | ||||
| Present value | 140911.7 | {21000*((1-(1+0.08)^-10)/0.08)} | |||
| Picture 4 | |||||
| i= | n= | ||||
| Cash payment | 0 | 0 | 250000 | ||
| Present value of 250000 face value | 10% | 1 year | 227272.7 | ||
| Present value of 45000 annuity | 10% | 20 years | 383110.4 | ||
| Total | 860383.1 | ||||
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