Question
Q1: For each of the following: Compute the Future value (FV) Present Value Years Interest rate Future Value $ 3,159 84,53 89,305 T 16 19
Q1: For each of the following:
Compute the Future value (FV)
Present Value | Years | Interest rate | Future Value |
$ 3,159 84,53 89,305 | T 16 19 26 | 13% Y 9 5 |
|
Compute Present Value |
15 8 13 25 |
7% 11 10 13 |
$ 17,328 41,517 7903,82 647,816
|
Compute the interest rate |
|
|
|
Present Value | Years | Interest rate | Future Value |
$ 715 905 15,000 70,300 | 11 8 23 16 |
| $ 1,381 1,718 141,832 312,815 |
Q2: Compute the Future value of $ 1,000 continuously c compounded 12 percent for:
5 years at a stated annual interest rate of
12 percent;
3 years at a stated annual interest rate of 10 percent.
10 years at a stated annual interest rate of 5 percent;
and
8 years at stated annual interest rate of 7 percent
Q3: Consider a firm with a contract to sell an asset for $ 115,000 three years from now, the asset costs $ 72,000 to produce today. Given a relevant discount rate on this asset is 13 percent per year. Will firm make a profit on this asset? At what interest rate does the firm just break even?
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