ne.cenga X xMindTap- Ceng x à Secure https://ng.cengage.com/static/nb/ui/evo/ind
ID: 2402971 • Letter: N
Question
ne.cenga X xMindTap- Ceng x à Secure https://ng.cengage.com/static/nb/ui/evo/index.html?elSBN-9781337793506id- DTAP ngage mework Click here to read the eBook: Present Values PRESENT AND FUTURE VALUES FOR DIFFERENT INTEREST RATES Find the following values. Compounding/discounting occurs annually. Round your answer nearest cent. a. An initial $600 compounded for 10 years at 10%. 1556 b. An initial $600 compounded for 10 years at 20%. $ 3715.00 C. The present value of $600 due in 10 year at 10%. d. The present value of $1,46S due in 10 years at 20%. e. The present value of $1,465 due in 10 years at 10%. 3799 Define present value. I. The present value is the value today of a sum of money to be received in the future a general is less than the future value. general is greater than the future value. general is equal to the future value. tl. The present value is the value today of a sum of money to be received in the future a t. The present value is the value today of a sum of money to be received in the future a V. The present value is the value in the future of a sum of money to be received today a general is less than the future valueExplanation / Answer
ANSWER -1
Future Value / Compounding = PV * ( 1+i ) ^ n
Present Value = FV / ( 1+i ) ^ n
Where FV = Future Value
i = Rate
n = Number of years
PV = Present Value
A) Future Value = 600 * ( 1.1) ^ 10
= 600 * 2.5937 = $1556
B) Future Value = 600 * ( 1.2) ^ 10
= 600 * 6.1917 = $ 3715
C) Present Value = 600 / ( 1.1 ) ^ 10
=600 * 0.3855 = $ 231
D) Present Value = 1465/ ( 1.2) ^ 10
= 1465 * 0 .1615 = $ 237
E) Present Value = 1465/ ( 1.1) ^ 10
= 1465 * 0 .3855 = $565
ANSWER 2 - Define present value
Option 1 - The present value is the value today of a sum of money to be received in the future which generally is less than the future value .
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.