Question

Chapter 5 Homework 6 Saved Help Save & Exit Submit For each of the following situations involving single amounts, solve for the unknown. Assume that interest is compounded annually. (I= interest rate, and n= number of years) (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar amount.) Present Value Future Value 48,000 10.0% Skipped 13 28,599 61,000 9.0% 12,569 S 47,653 S 42,000 3. eBook 12 120,000 24 12 6.0% 14,178 Hint References

Answer 1

Present Value = Future Value x PV Factor for nth year at i rate

1. Present Value = $48000 x 0.4241 = $20357
PV Factor @10% for 9th year = 0.4241

2. $28599 = $48000 x PV Factor for 13th year at i rate
PV Factor = 0.5958
Therefore interest rate is 4%, since PV Factor for 13th year @4% is nearest to 0.5958

3. $12569 = $42000 x PV Factor for nth year at 9%
PV Factor = 0.2993

Therefore nth year is 14th year, since PV Factor for 14th year @9% is nearest to 0.2992

4. $47653 = $120000 x PV Factor for 12th year at i rate
PV Factor = 0.3971
Therefore interest rate is 12%, since PV Factor for 12th year @12% is nearest to 0.3971

5. $14178 = Future Value x 0.4971
PV Factor @6% for 12th year = 0.4971

Future Value = $28521 or $28500