Question

Page < 3 > 0f 4 0 - ZOOM 6) Suppose you want to have loogoo at the end of ② 10 years in your bank savings account and 5% Interest will be pard annually, how much should you put into the Savings account now? 3) Draw a cash flow diagram. 3) Solve the problem by formula. in Solve the problem buy table fie centround interest tables) sources lo e A SLOB earch

Answer 1

ANSWER:

Cash flow diagram couldn't be uploaded due to technical problem and so i am answering part 2 and 3.

2) fv = $100,000

n = 10 and i = 5%

fv = pv * (1 + i) ^ n

100,000 = pv * (1 + 5%) ^ 10

100,000 = pv * (1.05) ^ 10

100,000 = pv * 1.6288

pv = 100,000 / 1.6288

pv = 61,391.254

3) fv = $100,000

n = 10 and i = 5%

pv = fv(p/f,i,n)

pv = 100,000(p/f,5%,10)

pv= 100,000 * 0.6139

pv = 61,390