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 $9,500 in the bank on January 1, 2000, at an interest rate of 12% compounded annually. How much has accumulated in the account by January 1, 2017? Round to the nearest whole dollar. 2. Mike Smith deposited $21,480 in the bank on January 1, 2007. On January 2, 2017, this deposit has accumulated to $50,851. Interest is compounded annually on the account. What rate of interest did Mike earn on the deposit? Round to the nearest whole percent. % 3. Lee Spony made a deposit in the bank on January 1, 2010. The bank pays interest at the rate of 9% compounded annually. On January 1, 2017, the deposit has accumulated to $17,170. How much money did Lee originally deposit on January1, 2010? Round to the nearest whole dollar. 4. Nancy Holmes deposited $4,750 in the bank on January 1 a few years ago. The bank pays an interest rate of 10% compounded annually, and the deposit is now worth $13,552. How many years has the deposit been invested? Round to the nearest whole year. years TABLE 9-1 Future Value of $1 (N) Periods 2% 35 5% 6% 101 126 15% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 24 26 28 30 1 02000 1.04040 1 06121 1.08243 1.10408 1.12616 1.14869 1.17166 1.19509 121899 1.24337 1.26824 129361 1 31948 1 34587 137279 140024 1.42825 1.45681 1 48595 154598 1.60844 1.67342 1.74102 181136 1.03000 1.06090 1.09273 1.12551 1.15927 1.19405 1.22987 126677 130477 1.34332 138423 1.42576 1.46853 1.51259 155797 1.60471 165285 1.70243 1.75351 1 80611 1.91610 203279 2.15659 228755 2.42726 1.04000 1.08160 1.12486 1.16980 121665 1.26532 1.31583 136857 1.42331 1.48024 153945 1.60103 1.66507 1.73168 1 80094 187298 1 94790 202580 2.10685 2.19112 2.36992 2.56330 2.77247 2 99870 3.24340 1.05000 1.10250 1.15763 121551 1.27628 1.34010 140710 147740 1,55133 1.62880 171034 1.79586 1 88565 1.97990 207830 2.18287 2.29202 240662 2.52695 2.65330 2.92526 3.22510 3.55567 3.92013 432194 1.06000 1.12360 1.19102 1 26248 133823 141852 1.50363 1.59386 1.68948 1.79086 1 89830 201220 2.13293 2.26090 239656 254035 2.69277 285434 3.02500 3.20714 3 60354 404893 4.54938 5:11169 5.74349 7% 1.07000 1.14490 1.22504 1.31080 1.40255 1.50073 1.80578 1.71819 1 83846 1.95715 210485 225219 2.40985 2.57853 275903 2.96216 3 15882 3.37993 3.61653 3.86968 4.43040 5.07237 580735 6.64884 7.61226 1 08000 1.16540 1.25971 1.30049 1.40833 158687 171382 185093 1.99900 2.15892 233164 251817 2.71962 2.93719 3.17217 342594 3.70002 399602 431570 466096 5.43854 634118 739635 862711 10.06266 1.10000 121000 133100 1.46410 1.61051 1.77156 1 94872 2.14359 235735 2.59374 285312 3.13843 345227 3.79750 4.17725 459497 505447 5.55982 6.11591 6.72750 814027 9.84973 11.91818 14 42099 17.44940 1.12000 125440 1.40433 1.57352 1.78234 197382 221008 247996 2.77308 3.10585 347865 389508 436349 438711 5.47357 6.13009 6 86604 7 58107 8.61276 9.64629 12.10031 15.17863 19.04007 23 BR387 29.95992 1.15000 172250 152088 1.74901 201135 231306 200002 305002 351788 404555 4.65239 535025 615229 707571 813706 335752 10.75126 12.37545 14 23177 16.36654 21.54475 28.62518 37 95680 50 06561 66 21177 TABLE 9.2 Present Value of $1 IN Periods 24 95 *% 5% 64 10% 154 1 2 3 94340 89000 B3902 79200 74726 70496 56500 62741 59190 55839 52679 3458 8734 81630 78290 71290 60634 4 9000D 82645 75131 58301 2092 56447 51316 48651 40410 0286 73219 71178 3552 56743 50663 45235 58201 54350 5035 47509 44401 49697 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 24 26 28 30 98039 96117 94232 92385 90573 88797 87056 85349 83670 B2035 B0426 78849 77303 75788 74301 72845 71416 70016 58043 67297 64684 62172 59758 57437 55207 97047 94260 91514 88849 16261 83748 81300 78941 76642 74409 72242 70138 68095 66112 64180 62317 60502 58739 57029 55368 52180 49193 46380 43708 41199 90154 92456 38900 89480 82130 79031 7599 73009 70250 67556 64958 .62480 60057 57748 55526 53391 51337 49363 47464 45639 42196 39012 36000 33348 30832 95230 90703 86384 82270 78353 74622 71063 67684 54461 61391 58488 55684 53032 50507 48102 45811 43630 41552 39573 37689 34186 31007 28124 25509 23138 46886 44230 41727 39366 37136 35034 33051 31180 27751 24698 21981 19583 17411 85734 7383 73503 08056 60017 58349 54027 50025 1319 OBAB 39711 35770 34046 31524 29189 27027 25025 23171 21455 18394 15770 13520 11591 09938 35040 31863 28966 26330 23939 21763 19784 17986 16351 14864 12285 10153 08391 08934 05731 3878 36245 33873 31657 29586 27651 25842 22571 19715 17220 15040 13137 6957 75614 5579 57175 49718 43230 3751 32000 28426 24718 21404 18691 1625 14133 12280 10686 09290 08081 07027 06110 04620 03450 0264 01937 01510 35061 32197 28748 25668 22917 20462 18270 16012 14564 13004 11611 10367 08264 05588 05252 06187 03338 TABLE 9-3 Future Value of Annuity of $1 IN) Periods 25 7% 8% 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 19 20 22 24 26 28 30 1.00000 2.02000 3.00040 4.12161 5.20404 6.30812 743428 858297 9.75463 10 94972 12.10872 13 41209 14.68033 15 97394 17 29042 18.63929 20.01207 21.41231 22 84056 24.29737 27 29898 30.42186 33 67091 3705121 40.56808 100000 2.03000 3.05090 4.180363 5.30914 8.46841 7.66246 889234 10.15911 11.46388 12 80780 14. 19203 15,61779 17 08632 1859891 20.15688 21.76159 23.41444 25.11687 26 87037 30 53678 3442647 38.55304 42.93092 4757542 1.00000 2.04000 3.12160 4.24546 5.41632 6.63298 789029 921423 10 58080 1200611 13.48635 1502581 16.62684 18.29191 2002359 21.82453 23 69751 25.54541 2767123 29.77808 3424797 39.08260 44 31174 49.96758 56.08494 100000 2.05000 3.15250 431013 5.52563 6.80191 8.14201 954911 11.02656 1257789 14 20579 15 91713 17.21298 1959863 21.57856 23.65749 25 84037 28.13238 30.53900 33 00595 38 50521 44.50200 51.11345 58.40258 66.43885 1 00000 206000 3.1360 437462 5.63709 6.97532 B39384 989747 1149132 13.18079 14.97164 16.80994 18 88214 21 01507 23 27597 25.67253 28 21288 30.90565 33.75999 36.78559 43.39029 50 81558 59.15638 68 52811 79.05819 1.00000 207000 3.21490 443994 5.75074 7.15329 8.65402 10.25080 11 97799 13 81645 15.78360 17 BA845 20.14064 22 55049 25.12902 27 88805 30 84022 33.99903 37 37896 40.99549 49 00574 58.17667 68 67647 80.69769 94.48079 1.00000 208000 324640 450511 5.88660 733500 8.32280 10 63560 1248796 1448636 1684540 18 97713 21 49530 2421452 27.15211 30 32428 33.75023 37.45024 41 44626 45.76196 55.45676 06.76476 7995442 9633883 11328321 100000 100000 210000 212000 331000 337440 454100 47793 6.10510 635285 771561 811519 948717 100001 11435 12 2006 135790 14.775.06 15 33742 1754874 18.53117 20 65458 21.38428 24 13313 24 52271 2802911 27 97408 3239200 31.77248 37 27971 35.94973 42.75328 40.54470 18 BB367 45 59917 55.74971 51.15909 83.43908 57 27500 72 05244 71.40275 30.50258 88.49733 118. 15524 109.18177 150 33393 134 20994 190 69880 164 49402 241 33268 10000 2 15000 3.47750 49603 574738 8753774 11 00 13.72082 1678584 2030372 243408 29.00167 34 35192 40 5001 47.58041 5571747 65.07509 75 83636 38 21181 102 44358 137.63164 184 16784 245.71197 227.10408 134 74515