Present Value and Future Value The following situations involve time value of money calculations: 1. A deposit

Question:

Present Value and The following situations involve time value of money calculations:
1. A deposit of $7,000 is made on January 1, 2010. The deposit will earn interest at a rate of 8%. How much will be accumulated on January 1, 2015, assuming that interest is compounded
(a) Annually,
(b) Semiannually, and
(c) Quarterly?
2. A deposit is made on January 1, 2010, to earn interest at an annual rate of 8%. The deposit will accumulate to $15,000 by January 1, 2015. How much money was originally deposited assuming that interest is compounded
(a) Annually,
(b) Semiannually, and
(c) Quarterly?

Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...