14.28 points Exercise F-1 Future value and present value To determine the approp

Question

14.28 points Exercise F-1 Future value and present value To determine the appropriate discount factorfs) using tables, click here to view Tables I, Il, III, or IV in the appendix. Alternatively, if you calculate the discount factor(s) using a formula, round to six (6) decimal places before using the factor in the problem. (Round your answers to the nearest dollar amount.) Required a. The future value of $27,000 invested at 5 percent for 11 years. uture value b. The future value of eight annual payments of $1,400 at 6 percent interest. uture value c. The amount that must be deposited today (present value) at 4 percent to accumulate $46,000 in five years. Present value d. The annual payment on a 11-year, 7 percent, $37,000 note payable. Annual payment

Explanation / Answer

(a) future value= present value* CVF(%,t)

     = $27000 *CVF(5%,11 years)

          =$27000*1.710

         = $ 46170

(b)future value= present value* CVAF(%,t)

=$1400* CVAF(6%,8 YEARS)

=$ 1400 *9.897

= $ 13855.80

(c) present value= future value* PVF(%,t)

= $46000* PVF(4%,5 years)

=$ 46000*0.822

= $37812

(d) annual income= principle amount* interest rate* year/ 100

= $37000*7%*1 year/100

= $2590

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