1. Compute following based on chart (show your work)
a. Compute Present Value
Future value | Years | Interest Rate |
$498 | 7 | 13% |
b. Compute Future Value
Present Value | Years | Interest Rate |
$123 | 13 | 13% |
c. Compute time period (Years)
Present Value | Future Value | Interest Rate |
$100 | $348 | 12% |
d. Compute the effective annual rate (EAR)
APR Stated Rate | Number of times compounded | Effective Rate |
5% | Semiannually | ? |
a) | |||||
present value = | =498/(1.13)^7 | ||||
211.68 | |||||
b) | Future value = | =123*(1+13%)^13 | |||
602.46 | |||||
c) | we have to use financial calculator to solve this problem | ||||
Put in calculator - | |||||
PV | -100 | ||||
FV | 348 | ||||
I | 12% | ||||
PMT | 0 | ||||
Compute N | 11 | year | |||
d) | APR = | 5% | |||
semiannual compounding. | |||||
effective rate = | =((1+5%/2)^2)-1 | ||||
5.06% |
1. Compute following based on chart (show your work) a. Compute Present Value Future value Years...
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