Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The formulas for Present Value of a single sum, Present Value of an Annuity, Future Value of a single sum and Future of an Annuity

The formulas for Present Value of a single sum, Present Value of an Annuity, Future Value of a single sum and Future of an Annuity so it should be a simple multiplication problem. The difficulty seems to be which table should you use. Solve the following problems and list which table your used.
1. If you invest $10,000 at 8%. How much money will you have in 9 years? Which table did you use?
2. If you want $13,000 in 13 years and the interest rate is 11%. How much money do you have to put in the bank today? .Which table did you use?
3. When her child entered kindergarten, Lee started saving for his college by putting $18,000 a year away. If the interest rate stayed constant at 12%, how much money will be in the college fund in 12 years? Which table did you use?
4. Congratulations, you will inherit $1.07 million dollars in 25 years and a company has offered to give you $50,250 today to give up the inheritance, Assuming interest is 13% what would net you the most money? Which table did you use?
5. Congratulations, you won on a scratch ticket to receive $8,500 per year for 15 years. If interest is 10%, how much would you need today to sell your ticket to somebody else? Which table did you use?
6. You bought a house for $100,000 and sold it 10 years later for $550,000. What was the yield on your house? if inflation is 8% did you actually make a profit? Which table did you use?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions