Presented next are four independent situations related to future and present values.

Requirement

1. Using the tables in this appendix, calculate the future or present value of each item as needed.

a. $5,000 is deposited in the bank today for a period of eight years. Calculate the value of the $5,000 at the end of eight years assuming it earns 5% interest.

b. How much must you invest today to receive $1,500 at the end of each year for the next four years, assuming you can earn 7% interest?

c. $3,500 will be invested at the end of each year for a period of five years. Calculate the value of the investment at the end of five years, assuming it earns 9% interest.

d. The company you work for wants to purchase a new piece of equipment that is estimated to cost $18,000 ten years from now. How much must it invest today to have the $18,000 necessary to purchase the equipment if it can earn 8% interest?