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Future Value and Present Value of a Single Payment $ 3 , 5 0 0 Future Values $ 3 , 0 0 0 $ 2

Future Value and Present Value of a Single Payment $3,500 Future Values $3,000 $2,986 $2,500 $2,000 $1,772 $1,500 Present Values $1,340 $1,000 $1,126 $1,000 $500 $0 n =01234562%5%10%20% Required: Today (n =0), a company invests $1,000 and expects that investment to grow 10% each period for the next six periods (n =6). What is the investment's 1. expected future value? A company expects to receive $1,772 in six periods. What is that amount's present value, assuming the company's other current investment 2. opportunities are expected to earn 10% per period? 3. The difference between the present value and future value for a given rate represents: 4. The difference between present value and future value: 5. The difference between present value and future value: A company has the choice of receiving $1,000 today from a customer or receiving $1,340 in six periods. 6. Which option does the company prefer, assuming the company's other current investment opportunities are expected to earn 5% per period? A company has the choice of receiving $1,000 today from a customer or receiving $1,200 in six periods. 7. Which option does the company prefer, assuming the company's other current investment opportunities are expected to earn 2% per period?

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