Homework: EXTRA CREDIT Chapter 12 Question 5, E12-28 Part 1 of 5 More info Solve various time value of money scenarios A (Click the icon to view the scenarios.) ( (Click the icon to view the present value factor table.) (Click the icon to view the future value factor table.) (Click the icon to view the present value annuity factor table.) ) (Click the icon to view the future value annuity factor table.) 1. Suppose you invest a sum of $3,500 in an interest-bearing account at the rate of 10% per year. What will the investment be worth six years from now? 2. How much would you need to invest now to be able to withdraw $11,000 at the end of every year for the next 20 years? Assume a 12% interest rate. 3. Assume that you want to have $175,000 saved seven years from now. If you can invest your funds at a 6% interest rate, how much do you currently need to invest? 4. Your aunt Rita plans to give you $2,000 at the end of every year for the next ten years. If you invest each of her yearly gifts at a 12% interest rate, how much will they be worth at the end of the 10-year period? 5. Suppose you want to buy a small cabin in the mountains four years from now. You estimate that the property will cost $54,500 at that time. How much money do you need to invest each your in an interest-bearing account at the rate of 8% per year to accumulate the purchase price? Scenario 1. Suppose you invest a sum of $3,500 in an interest-bearing account at the rate of 10% per year. What will the investme In six years the investment will be worth -X - X Reference Reference Present Value of $1 20% 0.833 1.528 2.10 2599 2.991 Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% % 8% 10% 12% % 14% 16% 18% Period 10.990 0.980 0.971 0.952 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 Period 2 1.970 1.942 1.913 1.836 1.859 1833 1.783 1.733 1.690 1.690 1.547 1.605 1.568 Period 3 2.941 2.884 2.929 2.775 2.723 2.672 3 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2402 2.322 2246 2.174 Period 4 3.902 3.908 3.717 3.630 3.543 3.435 3.312 3.170 3.037 2.914 2.798 2.690 Period 5 4.853 4.713 4.580 4.452 4.329 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.274 3.127 Period 6 5.795 5.801 5.417 5.2425.078 4.917 4.323 4.365 4.111 3.899 3.695 3.498 Period 7 6.728 6.472 6.230 6.002 5.786 5.5825.206 4.8694564 4.298 7 4.036 3.812 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.958 5.747 5.335 4.95! 4.639 4.344 4.DTE Period 9 8.566 8.162 7.786 7.435 7.108 6.8026.247 5.759 5.328 4.946 4,607 4.303 Period 10 9471 8.983 8.530 8.111 7.722 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.492 Period 11 10.368 9.787 9.253 2.760 8.305 7.887 7.139 6.495 5.939 5453 | 5.029 4.656 Period 12 11 255 10.575 9.954 9.3858.863 8.384 7.536 6.814 6.194 5.550 5.197 4.793 Period 13 | 12.134 11.348 10.635 9.988 9.394 8.853 7.904 7.103 6.424 5.842 5.842 5.342 Period 14 | 13.004 12.108 1129610.553 9.899 9.295 8.244 7.3676.628 6.002 5.488 5.00 Period 15 | 13.865 12.849 11.938 11.11810.380 9.712 8.559 7.6086.811 6.142 5.575 5.092 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 6.623 5.929 5.353 Period 25 22.023 19.523 17.413 15.622 14.094 12.793 10.675 9.077 7.843 6.873 6.097 5.467 period 30 25.808 22.896 19.600 17 292 15.372 13.765 11258 4.427 8.055 7003 6.177 5.517 Period 40 32.835 27.356 23.115 19.793 17.159 15.046 11.925 9.7798.244 7.105 6233 5.548 3.328 3.605 3837 4.031 4.192 Periods 1% 2% 2 3% 4% 5% 6 6% 8% 10% 8% 12% 14% 16% 18% 20% Period 1 0.990 0.880 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 Period 2 0.980 0.961 0.943 0.925 0.907 0.9070890 0.890 0.857 0.825 0.797 0.789 0.743 0.7180.694 Period 3 0.971 0.842 0.915 0.889 0.8640840 0.794 0.751 0.712 0.675 0.641 0.609 0.579 Period 4 0.961 0.924 0.888 0.855 0.8230.792 0.735 0,683 0.638 0.592 0.552 0.516 0.482 Periods 0.951 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0476 0.519 0.476 0.437 0.402 Period 8 0.942 0.942 0.088 0.637 0.790 0.746 0.705 0.630 0.564 0.507 0.507 0.456 0410 0.458 0.410 0.370 0.335 Period 7 0.933 0.71 0.813 0.760 0.71 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.279 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0.540 0.467 ( 0.404 0.351 0.305 0.266 (1.233 Period 90.94 0.037 0.768 0.703 0.6450.592 0.500 0.424 0.361 0.361 0.308 0.263 0.308 0.263 0.225 0.194 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.744 0.676 0614 0.558 0.463 0.388 0.322 0.270 0.227 0.191 0.162 Period 110.896 0.804 0.722 0.650 0.595 0.527 0.429 0.250 0.287 0.237 0.195 0.162 0.135 Period 12 0.887 0.788 0.701 0.788 0.701 0.625 0.557 0497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 Period 13 0.879 0.773 0.681 0.601 0.530 0,469 0.368 0.290 0.229 0.192 0.145 0.116 0.093 period 140.870 0.758 0.561 0.577 0.505 0442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 Period 15 0.861 0.743 0.642 0.565 0.491 0417 0.315 0.239 0.183 0.140 0.108 0.084 0.065 0.140 0.108 Period 200.820 0.873 0.554 0.456 0.377 0.32 0.215 0.149 0.104 0.073 0.051 0.037 0.028 0.073 Period 25 0.780 0.810 0.479 0.375 0.295 0233 0.146 0.092 0.059 0.038 0.024 0.0160.010 Period 30 0.742 0.552 0.412 0.308 0.231 0.174 0.099 0.067 0.033 0.020 0,012 0.007 0.004 Period 400.672 0.453 0.307 0.20 0.142 0.097 0.046 0.022 0.0110.005 0.003 0.001 0.001 4.327 4.439 4.533 4.811 4.675 4.010 4.870 4.948 4.979 4.997 Future Value of $1 3% Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 5% 1.050 1.103 1.158 1.216 1.276 6% 1.060 1.124 1.191 1.262 1.338 8% 1.080 1.166 1.260 1.360 1.469 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 16% 1.160 1.346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1.939 2.288 20% 1.200 1.440 1.728 2.074 2.488 Period 6 Period 7 Period 8 Period 9 Period 10 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.587 1.714 1.851 1.999 2.159 1.772 1.949 2.144 2.358 2.594 1.974 2.211 2.476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 2.436 2.826 3.278 3.803 4.411 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 6.192 Period 11 Period 12 Period 13 Period 14 Period 15 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1.319 1.346 1.384 1.426 1.469 1.513 1.558 1.539 1.601 1.665 1.732 1.801 1.710 1.796 1.886 1.980 2.079 1.898 2.012 2.133 2.261 2.397 2.332 2.518 2.720 2.937 3.172 2.853 3.138 3.452 3.797 4.177 3.479 3.896 4.363 4.887 5.474 4.226 4.818 5.492 6.261 7.138 5.117 5.936 6.886 7.988 9.266 6.176 7.288 8.599 10.147 11.974 7.430 8.916 10.699 12.839 15.407 Period 20 Period 25 Period 30 Period 40 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 1.806 2.094 2.427 3.262 2.191 2.666 3.243 4.801 2.653 3.386 4.322 7.040 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338 4.292 6.848 10.835 17.000 26.462 40.874 62.669 95.396 5.743 10.063 17.449 29.960 50.950 85.850 143.371 237.376 10.286 21.725 45.259 93.051 188.884 378.721 750.3781,469.772 Future Value of Annuity of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.000 2.010 3.030 4.060 5.101 2% 1.000 2.020 3.060 4.122 5.204 3% 1.000 2.030 3.091 4.184 5.309 4% 1.000 2.040 3.122 4.246 5.416 5% 1.000 2.050 3.153 4.310 5.526 6% 1.000 2.060 3.184 4.375 5.637 8% 1.000 2.080 3.246 4.506 5.867 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.779 6.353 14% 1.000 2.140 3.440 4.921 6.610 16% 1.000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3.572 5.215 7.154 20% 1.000 2.200 3.640 5.368 7.442 Period 6 Period 7 Period 8 Period 9 Period 10 6.152 6.308 6.468 6.633 6.802 7.214 7.434 7.662 7.898 8.142 8.286 8.583 8.892 9.214 9.549 9.369 9.755 10.159 10.583 11.027 10.462 10.950 11.464 12.006 12.578 6.975 8.394 9.897 11.491 13.181 7.336 7.716 8.923 9.487 10.637 11.436 12.488 13.579 14.487 | 15.937 8.115 10.089 12.300 14.776 17.549 8.536 10.730 13.233 16.085 19.337 8.977 11.414 14.240 17.519 21.321 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20.799 25.959 Period 11 Period 12 Period 13 Period 14 Period 15 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 14.94715.974 17.086 18.292 19.599 21.015 | 24.215 27.975 16.097 | 17.29318.599 20.024 21.579 23.276 27.152 31.772 20.655 24.133 28.029 32.393 37.280 23.045 27.271 32.089 37.581 43.842 25.733 30.850 36.786 43.672 51.660 28.755 34.931 42.219 50.818 60.965 32.150 39.581 48.497 59.196 72.035 Period 20 Period 25 Period 30 Period 40 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 115.380 146.628 186.688 28.243 32.030 36.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 249.214 342.603 471.981 34.785 40.568 47.575 56.085 | 66.43979.058 113.283 164.494 241.333 356.787 530.312 790.948 1,181.882 48.886 60.402 75.401 95.026 120.800 154.762 259.057 442.593 767.091 1,342.025 2,360.757 4,163.213 7,343.858