Creating a praph with years on the harizontal axis and fV on the vertical axis e. Calculating the number of years required to double the population f. Finding the PV and FV of an ordinary annuity g. Recalculating the PV and FV for part f if the annuity is an annuity due Present value of annuity due (PV) Future value of annuity due (FV) "NHA h. Recalculating the PV and the FV for parts a and c if the interest rate is semiannually com| Future value (FV) Present value (PV) Findina the annual navments for an ordinarv annuitv and an annuitu due (1) Calculating the ellective artual rate for rech bank and the lutare values of the deposid at the end of 1 yoar and? 2 yarn Nisminal rate (tow) Excel Activity: Time value of money The data has bect colleded in the Micronote Ercel Hile below. Downiload the soreadsheet and perform the feguired analygis to answer the questions below. De not round intermediate calculations. Enter your answers as positive valuek. a. Find the FV di 31,000 invered to namn 8% after 6 years. found your antwer to the nearest cent. 3 Choose the correct graph of future value as a function of time and rate. Note: blue line is for 0%, orange line is for 6%, and grey line is for 20% The correct praph is B. t: Excel Activity-Time value of money c. Find the PV of $1,000 due in 6 years if the discount rate is 896 . Round your answer to the nearest cent. d. A security has a cost of $1,000 and will return $4,000 after 6 years. What rate of roturn does the sicurity brovidn? Round yo two decimal places. d. A security has a cost of $1,000 and will return $4,000 after 6 years. What fate of retum does the secirity movide? Round vour anmwer to two decimal placen. population to double? Round your answer to the nearest whole number vears f. Find the PV of an ordinary annuity that pays $1,000 ench of the next 6 years if the interest fath le 13 the Then find the fy of that samie annuity: Round youf atiswers to the nearest oent. PN of ordinary annuityz $ Fy of orditary arinuitys s nearest cant. Py of annulty tisesis Fo of anmuth does s Five banks offer nominal rates of 5% on deposits, but A pays interestannuafy, B pays seariannually, C pays quarterfy, D pars monthiy nd E pays dally. Acsurue 365 days in a vear, 1. What effective annehil rate does each bank pay? df you deposit $6,000 in ench bank today, how much will you have in euch bank at the end of 1 vear? 2 vears? Found your answent to two decimal piaces. A7 Found your answers to two decimal places. A7. Round your answers to two decimal places. Semiannually for B, quarterly for C, monthly for D, and daily for E - with payments begirining today. How large munt the payments be to each bank? Round your aitwers to the nearect cent. 4. Even if the five banks provided the same effective annual rate, would a rational investor be indifferent between the banks? It is more finely that an invegtor would prefer the bank that compounded fricquently. 4. Suppose you boirow $16,000, The interest rate is 7%, and It requires 4 equal end-ofyear paymnts- Set up an amortization schedule that? shows the arinuai payments, interest payments, principal fypayments, and beolniling aid ending loan balancest Round your answers to the nearest cent. If your answif is tero, enter . It is more likely that an investor would prefer the bank that compounded frequently: 1. Suppose you borrow $16,000. The interest rate is 7%, and it requires 4 equal end-of-yeor pryments. Set up an amortization schedule that shows the annual payments, interest payments, principal repayments, and beginning and ending forin balances, Round your angwers to the nearest cent. If your answer is zero, enter " 0 ". The correct graph is
