Exercise A3-17 (Algorithmic) Present Values

Use Present Value Tables or your calculator to complete the requirements below.

Required:

a. Determine the present value of a single $13,200 cash flow in 7 years if the interest (discount) rate is 8% per year. Round your answer to the nearest cent, if rounding is required. $___________

b. Determine the number of periods for which $5,820 must be invested at an annual interest (discount) rate of 7% to produce an investment balance of $10,000. Round your answer to the nearest whole number of periods, if rounding is required. _____________periods

c. Determine the size of the annual cash flow for a 25-year annuity with a present value of $49,113 and an annual interest rate of 9%. One payment is made at the end of each year. Round your answer to the nearest cent, if rounding is required. $_________

d. Determine the annual interest rate at which an investment of $2,542 will provide for a single $4,000 cash flow in 4 years. Round your answer to the nearest whole percentage rate (for example, 10.8% rounds to 11%). _________%

e. Determine the annual interest rate earned by an annuity that costs $17,119 and provides 15 payments of $2,000 each, one at the end of each of the next 15 years. Round your answer to the nearest whole percentage rate (for example, 10.8% rounds to 11%). ________%