Time Value of Money Concept

The following situations involve the application of the time value of money concept. Use the full factor when calculating your results.

Use the appropriate present or future value table:

FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1

1. Janelle Carter deposited $9,760 in the bank on January 1, 2000, at an interest rate of 10% compounded annually. How much has accumulated in the account by January 1, 2017? Round to the nearest whole dollar.

3. Lee Spony made a deposit in the bank on January 1, 2010. The bank pays interest at the rate of 5% compounded annually. On January 1, 2017, the deposit has accumulated to $16,410. How much money did Lee originally deposit on January1, 2010? Round to the nearest whole dollar.

TABLE 9-2 Present Value of $1 (N) Periods 3% 2% 4% 5% 6% 7% 8% 10% 12% 15% 1 .95238 .89286 .96154 .92456 2 .90703 .86384 .92593 .85734 .79383 .93458 .87344 .81630 .76290 .79719 .71178 .86957 .75614 .65752 3 .98039 .96117 .94232 .92385 .90573 .88797 .88900 97087 .94260 .91514 .88849 .86261 .83748 .73503 .57175 4 5 .85480 .82193 .79031 .63552 .56743 .71299 .68058 49718 6 .90909 82645 .75131 .68301 62092 .56447 -51316 46651 42410 .38554 .66634 .63017 .50663 43233 7 .87056 .62275 .58349 45235 .37594 8 .82270 .78353 .74622 .71068 .67684 .64461 .61391 .58468 .55684 94340 .89000 .83962 .79209 .74726 .70496 .66506 .62741 .59190 .55839 .52679 49697 46884 44230 41727 .81309 .78941 .76642 .74409 .58201 32690 .75992 .73069 .70259 .67556 .64958 .62480 9 28426 24718 10 11 40388 .36061 .32197 28748 25668 22917 .54393 .50835 .47509 44401 .41496 .38782 .36245 .35049 .31863 12 .54027 50025 46319 42888 .39711 .36770 .34046 .31524 .29189 .27027 13 .72242 .70138 .68095 .66112 .64186 .62317 .60502 .58739 14 20462 .18270 .85349 .83676 .82035 .80426 .78849 .77303 .75788 .74301 .72845 .71416 .70016 .68643 .67297 .64684 .62172 .59758 .57437 .55207 15 .60057 .57748 .55526 .53391 .51337 49363 .53032 .50507 48102 45811 43630 21494 .18691 .16253 .14133 .12289 .10686 .09293 .08081 39365 16 17 .37136 .33873 .31657 .29586 18 35034 .25025 41552 .39573 . 16312 .14564 .13004 .11611 .10367 19 .57029 47464 .27651 .28966 26333 23939 21763 .19784 .17986 16351 .14864 .12285 10153 .08391 .06934 .05731 .07027 .23171 .21455 20 .55368 33051 31180 27751 45639 .37689 25842 22 42196 .22571 .18394 24 .39012 24698 .19715 . 15770 .52189 .49193 46369 43708 41199 26 28 .36069 .06110 .04620 03493 .02642 .01997 .01510 34185 31007 28124 25509 23138 21981 .19583 17411 33348 30832 .08264 .06588 .05252 .04187 .03338 .17220 . 15040 .13137 13520 .11591 .09938 30 TABLE 9-4 Present Value of Annuity of $1 (N) Periods 3% 4% 5% 6% 7% 8% 12% 15% 1 2% 98039 1.94156 2.88388 97087 1.91347 .92593 1.78326 2 .96154 1.88609 2.77509 3.62990 .93458 1.80802 2.62432 .86957 1.62571 2.28323 2.85498 3 .89286 1.69005 2.40183 3.03735 3.60478 2.82861 3.80773 4 5 4.71346 3.71710 4.57971 5.41719 6.23028 6 3.38721 4.10020 4.76654 5.38929 5.97130 5.60143 6.47199 4.11141 2.57710 3.31213 3.99271 4.62288 5.20637 5.74664 6.24689 6.71008 7 8 9 6.51523 7.01969 7.78611 8.53020 9.25262 9.95400 10 .94340 1.83339 2.67301 3.46511 4.21236 4.91732 5.58238 6.20979 6.80169 7.36009 7.88687 8.38384 8.85268 9.29498 9.71225 10.10590 10.47726 10.82760 4.45182 5.24214 6.00205 6.73274 7.43533 8.11090 8.76048 9.38507 9.98565 10.56312 11.11839 11.65230 .95238 1.85941 2.72325 3.54595 4.32948 5.07569 5.78637 6.46321 7.10782 7.72173 8.30641 8.86325 9.39357 9.89864 10.37966 10.83777 11.27407 11.68959 12.08532 12.46221 13.16300 4.56376 4.96764 5.32825 5.65022 5.93770 6.19437 7.32548 8.16224 8.98259 9.78685 10.57534 11.34837 12.10625 12.84926 13.57771 14.29187 11 7.13896 7.53608 10% .90909 1.73554 2.48685 3.16987 3.79076 4.35526 4.86842 5.33493 5.75902 6.14457 6.49506 6.81369 7.10336 7.36669 7.60608 7.82371 8.02155 8.20141 8.36492 8.51356 8.77154 8.98474 3.35216 3.78448 4.16042 4.48732 4.77158 5.01877 5.23371 5.42062 5.58315 5.72448 5.84737 5.95423 12 13 6.42355 6.62817 14 7.02358 7.49867 7.94269 8.35765 8.74547 9.10791 9.44665 9.76322 10.05909 10.33560 10.59401 11.06124 15 10.63496 11.29607 11.93794 12.56110 13.16612 16 7.90378 8.24424 8.55948 8.85137 9.12164 9.37189 9.60360 9.81815 6.81086 6.97399 7.11963 17 18 12.16567 12.65930 13.13394 14.99203 15.67846 16.35143 7.24967 7.36578 6.04716 6.12797 6.19823 6.25933 19 11.15812 20 13.59033 11.46992 7.46944 7.64465 22 10.20074 13.75351 14.32380 14.87747 15.93692 16.93554 17.87684 18.76411 19.60044 24 13.79864 11.46933 10.52876 7.78432 17.65805 18.91393 20.12104 21.28127 22.39646 26 14.45112 15.24696 15.98277 16.66306 17.29203 12.04158 12.55036 13.00317 13.40616 13.76483 14.37519 14.89813 15.37245 28 11.82578 12.13711 12.40904 10.80998 11.05108 11.25778 9.16095 9.30657 9.42691 6.35866 6.43377 6.49056 6.53351 6.56598 7.89566 7.98442 8.05518 30 TABLE 9-3 Future Value of Annuity of $1 (N) Periods 2% 3% 4% 5% 6% 7% 8% 10% 12% 15% 1 1.00000 2 1.00000 2.02000 3.06040 1.00000 2.04000 3.12160 4.24646 5.41632 1.00000 2.06000 3.18360 4.37462 2.05000 3.15250 4.31013 3 1.00000 2.07000 3.21490 4.43994 4 4.12161 1.00000 2.08000 3.24640 4.50611 5.86660 7.33593 8.92280 10.63663 5 5.52563 5.63709 5.75074 5.20404 6.30812 7.43428 1.00000 2.10000 3.31000 4.64100 6.10510 7.71561 9.48717 11.43589 13.57948 15.93742 1.00000 2.12000 3.37440 4.77933 6.35285 8.11519 10.08901 12.29969 14.77566 17.54874 6 1.00000 2.15000 3.47250 4.99338 6.74238 8.75374 11.06680 13.72682 16.78584 20.30372 6.80191 7.15329 6.63298 7.89829 6.97532 8.39384 7 8.14201 8.65402 8 8.58297 9.21423 1.00000 2.03000 3.09090 4.18363 5.30914 6.46841 7.66246 8.89234 10.15911 11.46388 12.80780 14.19203 15.61779 17.08632 18.59891 20.15688 21.76159 9.54911 9 10.58280 9.75463 10.94972 12.48756 9.89747 11.49132 13.18079 11.02656 12.57789 10.25980 11.97799 13.81645 15.78360 10 12.00611 14.48656 11 12.16872 14.20679 14.97164 16.64549 18.53117 20.65458 24.34928 12 16.86994 17.88845 21.38428 24.13313 29.00167 13.48635 15.02581 16.62684 18.29191 13 15.91713 17.71298 19.59863 18.88214 20.14064 13.41209 14.68033 15.97394 17.29342 18.97713 21.49530 24.21492 24.52271 28.02911 34.35192 14 21.01507 32.39260 27.97498 31.77248 15 21.57856 23.27597 27.15211 37.27971 16 18.63929 20.01207 20.02359 21.82453 23.69751 23.65749 25.84037 17 25.67253 28.21288 30.90565 33.75999 22.55049 25.12902 27.88805 30.84022 33.99903 37.37896 40.99549 30.32428 33.75023 37.45024 41.44626 42.75328 48.88367 55.74971 63.43968 40.50471 47.58041 55.71747 65.07509 75.83636 88.21181 102.44358 18 23.41444 25.64541 35.94973 40.54470 45.59917 51.15909 57.27500 28.13238 21.41231 22.84056 19 27.67123 30.53900 33.06595 20 24.29737 36.78559 43.39229 45.76196 55.45676 29.77808 34.24797 39.08260 72.05244 92.50258 22 27.29898 25.11687 26.87037 30.53678 34.42647 38.55304 42.93092 71.40275 24 26 38.50521 44.50200 51.11345 58.40258 66.43885 49.00574 58.17667 68.67647 80.69769 30.42186 33.67091 37.05121 40.56808 44.31174 137.63164 184.16784 245.71197 50.81558 59.15638 68.52811 66.76476 79.95442 95.33883 88.49733 109.18177 134.20994 164.49402 118.15524 150.33393 190.69889 241.33268 28 327.10408 49.96758 56.08494 30 47.57542 79.05819 94.46079 113.28321 434.74515 TABLE 9-1 Future Value of $1 (N) Periods 2% 3% 4% 5% 6% 7% 8% 10% 12% 15% 1 1.03000 1.04000 1.06000 1.07000 1.12000 1.25440 2 1.02000 1.04040 1.06121 1.06090 1.09273 1.08160 1.12486 1.05000 1.10250 1.15763 1.21551 1.27628 1.14490 1.22504 3 1.40493 4 1.08243 1.12551 1.31080 1.16986 1.21665 1.08000 1.16640 1.25971 1.36049 1.46933 1.58687 1.71382 1.10000 1.21000 1.33100 1.46410 1.61051 1.77156 1.94872 2.14359 5 6 1.26532 7 1.34010 1.40710 1.47746 1.55133 1.62889 1.40255 1.50073 1.60578 1.71819 1.83846 1.96715 8 1.12360 1.19102 1.26248 1.33823 1.41852 1.50363 1.59385 1.68948 1.79085 1.89830 2.01220 2.13293 2.26090 1.57352 1.76234 1.97382 2.21068 2.47596 2.77308 3.10585 1.85093 9 10 1.31593 1.36857 1.42331 1.48024 1.53945 1.60103 1.66507 1.73168 1.99900 2.15892 2.33164 11 1.71034 1.10408 1.12616 1.14869 1.17166 1.19509 1.21899 1.24337 1.26824 1.29361 1.31948 1.34587 1.37279 1.40024 1.42825 2.10485 2.35795 2.59374 2.85312 3.13843 3.45227 3.47855 12 2.25219 2.51817 3.89598 13 2.71962 4.36349 14 2.93719 1.15000 1.32250 1.52088 1.74901 2.01136 2.31306 2.66002 3.05902 3.51788 4.04556 4.65239 5.35025 6.15279 7.07571 8.13706 9.35762 10.76126 12.37545 14.23177 16.36654 21.64475 28.62518 37.85680 50.06561 66.21177 1.15927 1.19405 1.22987 1.26677 1.30477 1.34392 1.38423 1.42576 1.46853 1.51259 1.55797 1.60471 1.65285 1.70243 1.75351 1.80611 1.91610 2.03279 2.15659 2.28793 2.42726 1.79586 1.88565 1.97993 2.07893 2.18287 2.29202 3.79750 4.17725 1.80094 2.39656 15 16 3.17217 2.40985 2.57853 2.75903 2.95216 3.15882 3.37993 2.54035 3.42594 17 1.87298 1.94790 2.02582 2.69277 18 19 3.61653 20 1.45681 1.48595 1.54598 1.60844 1.67342 1.74102 22 2.40662 2.52695 2.65330 2.92526 3.22510 3.55567 3.92013 4.32194 2.10685 2.19112 2.36992 2.56330 2.77247 2.99870 3.24340 2.85434 3.02560 3.20714 3.60354 4.04893 4.54938 5.11169 5.74349 4.88711 5.47357 6.13039 6.86604 7.68997 8.61276 9.64629 12.10031 15.17863 19.04007 23.88387 4.59497 5.05447 5.55992 6.11591 6.72750 8.14027 9.84973 11.91818 14.42099 17.44940 3.70002 3.99602 4.31570 4.66096 5.43654 6.34118 7.39635 8.62711 10.06266 3.86968 4.43040 5.07237 24 26 5.80735 6.64884 28 30 1.81136 7.61226 29.95992