1. Read these two statements: a. John invests $1,000 today at 6%. How much will
ID: 2499925 • Letter: 1
Question
1. Read these two statements: a. John invests $1,000 today at 6%. How much will John's investment grow to in five years? b. Mary is looking at an investment that will pay her $4,000 in two years. How much should Mary pay for this investment if she demands a rate of return of 6%? Which one of these is a future value problem? Which one is a present value problem? 2. Referring to Question 1, answer statement a; then answer statement b. 3. Bill invests $1,000 today at 8% interest. We want to calculate the amount this investment will grow to in 20 years. Can you create formula that will compute this future value? 4. Fill in the following table: Future Value of $1.00 Per. 4% 5% 7% 9% 1 1.0400 2 1.0816 3 1.1248 4 5. Find the following present values. a. The present value of $10,000 to be received in 3 years, discounted at 8%...and b. the present value of $5,000 to be received in 3 years discounted at 8%. Can you prove that your answers are correct?
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1. Read these two statements: a. John invests $1,000 today at 6%. How much will
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