Present and future values for different interest rates Find the following values

Question

Present and future values for different interest rates

Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent.

An initial $700 compounded for 10 years at 9%.

$  

An initial $700 compounded for 10 years at 18%.

$  

The present value of $700 due in 10 year at a discount rate of 9%.

$  

The present value of $2,915 due in 10 years at 18%.

$  

The present value of $2,915 due in 10 years at 9%.

$  

Define present value.

The present value is the value today of a sum of money to be received in the future and in general is less than the future value.

The present value is the value today of a sum of money to be received in the future and in general is greater than the future value.

The present value is the value today of a sum of money to be received in the future and in general is equal to the future value.

The present value is the value in the future of a sum of money to be received today and in general is less than the future value.

The present value is the value in the future of a sum of money to be received today and in general is greater than the future value.

-Select-IIIIIIIVVItem 6

How are present values affected by interest rates?

Explanation / Answer

Ans:

1. 1432.678 $

2. 2484.68 $

3. 446.715 $

4. 519.98 $

5. 901.80 $

6. option 1 (The present value is the value today of a sum of money to be received in the future and in general is less than the future value.)

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