9:57 Done 20 of 24 PROBLEMS Basic Problems Future vabae I. You invest $3,000 for
ID: 1172062 • Letter: 9
Question
9:57 Done 20 of 24 PROBLEMS Basic Problems Future vabae I. You invest $3,000 for three years at 12 percent. a What is the value of your invesment after one year? Mutiply $3,000 x 1.12 h What is the value of your investment afher two years? Mliply your answer to part a by 1.12 c. What is the value of your investment afher dheee years? Maltipy your answer to part b by 1.12. This gives your final answer d Confirm that your final answer is correct by going to Appedis A (ature value of $1),and koking up the future value forR"3" ???-12percent. Multiply this tabular value by $3,000 and compase your answer to the answer in part c. There may be a slight difference dae to rounding Preset va 2. What is the present value of a $7,900 in 10 years at 11 percent? b $16,600 in 5 years at 9 perceer? c. $26,000 in 14 years at 6 percent? ? what is the present value of S 140,000 to be teceied her 30 years with 14 percent discount rate? Present va LO93) 3. h Would the present value of the funds in part a be enough so buy a $2,900 concert ticket? Present v 4. You will receive $6,800 three years from now. The discount rate is 10 percent a What is the value of your investment two years from no? Mutiply 56,800 x 909 (one year's discount rate at 10 percent. What is the value of your investment one year answer to part a by 909 (one year's discount rate an 10 percent). &Explanation / Answer
Question 2:
a) Present value of $7,900 in 10 years at 11 percent
= 7900/ (1.11)^10
= 7900/ 2.84
= $2,781
b) Present value of $16,600 in 5 years at 9 percent
= 16,600/ (1.09)^5
= 16,600/ 1.54
= $10,779
c) Present value of $26,000 in 14 years at 6 percent
= 26,000/ (1.06)^14
= 26,000/ 2.261
= $11,499
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