5:08 AM 100% +

100% < Back 10. 2 5:08 AM rivision ch5.docx value concept Answer each of the following questions. ps.12. a. What Single made today, earning 12% interest, Will be worth 56,000 at the end of 6 years? b. is of to at the of 6 yea di+ rate is 12%? c. What is the pay today for a promise you at thc end of years if your is 12%? d. Compare, Contrast, and discuss your findings in parts a through c. Present value concept N. 6, 1. 12%, IA' S6,ooo solve pv FV=S6.oon Solve Solve for pv Thc answer to all parts is thc same, In cach casc thc same question is being asked but in a different Way. PS 13 Jim offe today. will him SSOO tluee a. [f his is 7% annually, What value he place on this b. What is the he should purchase this payment If lim can this for less 'han the amount what imply about of turn that will on the t Personal finance; Time Value LG 2; Basic in PS-13. a. PS-19_ Solve for PV = S408.15 Jim should be willing to pay no more than S408.15 for this future Sum given that his opportunity cost is 7% If Jim pays less then 408. I S, his rate of return will exceed PS-19 f that follmv tlu future of An Mdinary annuity. An annuity due, o FM case in A of CQ_mpanying table, a IRYiod a"uming it is b. fiulings in part-S and All else bemg identical, which type of d us preferab!ei Exp!ain why. Future value or an annuity LG 3; Intermediate a. Future value Of o t dinary annuity s. annuity due (l) Ordinary Annuity C Solve FV SN6,21fA1 12%, PMT=Ssoo Solve for S4,0S7.S9 N - S, PMT= sgo,ooo Solve for - S223 ,248 Solve fMFV I = 14%, PMT solve S2,140.721.os (2) Annuity Due S36.216.41 S4,057.59x 1.12 = S22g;248 1.20 $267,897.60 S126,827A7x 1.09= S138,241.92