Calculating Future Values [LO1] For each of the following, compute the future value: Present Value Years Interest Rate Future Value $2,328 11 13% $7,513 7 9% $74,381 14 12% $192,050 16 6% 2. Calculating Present Values [LO2] For each of the following, compute the present value: Present Value Years Interest Rate Future Value 13 9% $16,832 4 7% $48,318 29 13% $886,073 40 21% $550,164 3. Calculating Interest Rates [L03] Solve for the unknown interest rate in each of the following: Present Value Years Interest Rate Future Value $181 5 $317 $335 17 $1,080 $48,000 13 $185,382 $40,353 30 $531,618 4. Calculating the Number of Periods [L04] Solve for the unknown number of years in each of the following: Present Value Years Interest Rate Future Value $560 7% $1,389 $810 8% $1,821 $18,400 9% $289,715 $21,500 11% $430,258 5. Present Value and Multiple Cash Flows [L01] McCann Co. has identified an investment project with the following cash flows. If the discount rate is 10 percent, what is the present value of these cash flows? What is the present value at 18 percent? At 24 percent? Year Cash Flow 1 $530

2 $690 3 $875 4 $1,090 5. Calculating Annuity Present Value [L01] An investment offers $4,350 per year for l5 years, with the first payment occurring one year from now. If the required return is 6 percent, what is the value of the investment? What would the value be if the payments occurred for 40 years? For 75 years? Forever? 6. Calculating Annuity Cash Flows [L01] If you put up $41,000 today in exchange for a 5.1 percent, l5-year annuity, what will the annual cash flow be? 7. Calculating EAR [L04] Find the EAR in each of the following cases: Stated Rate (APR) # Compounding Periods Effective Rate (EAR) 9% Quarterly 16% Monthly 12% Daily 11% Infinite 8. Calculating APR [L04] Find the APR, or stated rate, in each of the following cases: Stated Rate (APR) # Compounding Periods Effective Rate (EAR) Semiannually 11.1% Monthly 19.6% Weekly 10.5% Infinite 8.4% 9. Calculating Number of Periods [L03] One of your customers is delinquent on his accounts payable balance. Youve mutually agreed to a repayment schedule of $450 per month. You will charge 1.3 percent per month interest on the overdue balance. If the current balance is $18,000, how long will it take for the account to be paid off? 10. You would like to start saving for your retirement and are trying to figure out how much to save. You estimate that you will need $250,000 per year for the 35 years youll be retired. In addition, youd like to have an additional $250,000 in your fifth year of retirement to buy a boat. Assume that you plan to save an equal amount of money every year, starting next year for the 40 years you will be working (save in years 1-40, withdraw in years 41 -75, buy boat in year 46) How much do you need to save each year if the interest rate is 6%?