Question

E Grades for Kareem Algatami: B x Test 1 Ch 1 - 3 Part 2 X C Get Homework Help With Cheç x + € → C G Using the following table, calculate the taxes for an individual with taxable income of $45,000. 10% Up to $8,500 15% $8,500-$34,500 25% $34.... e Test 1 Ch 1 - 3 Part 2 i Seved Help Save & Exit Submit Problem 1-6 (L01.3) Using time value of money tables (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D), calculate the following. a. The future value of $510 six years from now at 6 percent. (Round your FV factor to 3 decimal places and final answer to 2 decimal places.) points (8 01:28:24) Future value eBook Hint b. The future value of $375 saved each year for 10 years at 8 percent. (Round your FVA factor to 3 decimal places and final answer to 2 decimal places.) Future value c. The amount a person would have to deposit today (present value) at an interest rate of 5 percent to have $1,400 five years from now. (Round your PV factor to 3 decimal places and final answer to 2 decimal places.) Deposit Deposit 1 Graw < Prex 6 of 17 Next >

Answer 1

ye layout Formulas Data Review View Developer Calibet 11 A A Copy - Format Painter Clipboard 021 - Wrap Text ** Merge & cent Alionment Font с 1 a) FV Factor (where i=discount rate=6%) = (1+i)n = (1.06)^6 = '1.418 rounded to 3 decimal places Future Value co ou = Amount * FV Factor = $510*1.418 = $723.18 9 b) 12 FV Annuity factor = C*{(1+i)n-1} / where C = Cash flow per period = $ 375 i = interest rate = 8% = 0.08 n=number of payments = 10 years = $375* {(1+0.08) 10 - 1}/0.08 = $5,432.46 Note: It is assumed that it is a Ordinary Annuity 13 15 16 17 c) 18 19 20 Future Value $1,400 $1,400/(1.05) A5 $ 1,400/1.276 = Present Value *(1+i)an = Present Value *(1+0.05)45 Present Value $1,097.18 21 Hence amount to be deposited today is $ 1,097.18 22 23 24 d) Present Value Annuity factor = {1 - (1+r)^n}/r = (1-(1+0.08 )^-7}/0.08 = (1 -0.583)/0.08 = 5.206 Amount to be deposited today = Cash flow Present value annuity factor $ 500*5.206 $ 2,603 31 32 * Ready Sheeti O Type here to search