Question

. Calculate the present value of each of the following items. Round all answers to the nearest whole number.

a. $90,000 ten years hence if the annual interest rate is

1. Eight percent compounded annually. $Answer

2. Eight percent compounded semiannually. $Answer

3. Eight percent compounded quarterly. $Answer

b. $1,000 received at the end of each year for the next eight years if money is worth ten percent per year compounded annually. $Answer

c. $600 received at the end of each six months for the next fifteen years if the interest rate is eight percent per year compounded semiannually. $Answer

d. $500,000 inheritance ten years hence if money is worth ten percent per year compounded annually. $Answer

e. $2,500 received each half year for the next ten years plus a single sum of $85,000 at the end of ten years if the interest rate is twelve percent per year compounded semiannually. $Answer

Answer 1

The answers are on the sheet attached