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CHAPTER 12A - Written Homework 1. Define the concept of the time value of money. 2. What is an annuity? 3. Find the PVIF (present value interest factor) for a single dollar amount for 8 periods with an interest rate of 7%. 4. Find the PVIF for a single dollar amount for 12 periods with an interest rate of 7%. 5. Find the PVIF-OA (present value interest factor of an ordinary annuity) for an annuity for 8 periods and an interest rate of 7%. 6. Find the PVIF-OA for an annuity for 20 periods and an interest rate of 12%. 7. Find the FVIF (future value interest factor) for a single dollar amount for 6 periods at 5%. 8. Find the FVIF-OA for an annuity for 6 periods at 5%. 9. What is the present value of $500,000 to be paid in 10 years with an interest rate of 8 percent? 10. What is the present value of 10 equal payments of $15,000 with an interest rate of 5.5 percent? 11. You want a fund of $500,000 so you can take a trip around the world 20 years from today. You are able to earn 8 percent on your investments. How much should you deposit each year to build the travel fund that you want? 12. What is the present value of $200,000 to be paid in 7 years with an interest rate of 7 percent? 13. You have $22,000 to invest. What is the better investment: (A) earning 6% compounded annually for 10 years or (B) earning 6% compounded semi-annually for 10 years? SHOW CALCULATIONS 14. You want to have $15,000 at the end of 8 years. How much must you invest today if the interest rate is 4% 15. You save $4.000 ner vear for 5 vears. from age 16 to age 20 . It is invested in a mutual