Calculate the following four problems using Interest Tables, Formulas, Excel, an

Question

Calculate the following four problems using Interest Tables, Formulas, Excel, and the Calculator. Thus, each problem (1-4) should be completed using four different methods. PLEASE SHOW ALL WORK FOR EACH OF THE FOUR METHODS FOR EACH PROBLEM ON THE SAME EXCEL SHEET(S). Do not put answers here for questions 1 to 4.

1. Determine the future value of $100,000 at 4% for 7 years ____________________________________

2. Determine the present value of $100,000 at 7% for 4 years ___________________________________

3. If you are to receive 1727 each year (ordinary annuity) for the next 6 years, determine what this annuity is worth right now assuming 7 interest ____________________________

4. What is the future value of 1727 a year for 4 years at 7 interest? _________________________________________

Explanation / Answer

1) Future value = $100000*FVIF @ 4% 7 years = $100000*1.31593 = $131593 2) Present value = $100000*PVIF @ 7% 4 years = $100000*0.76289 = $76289 3) Annuity is worth = $1727*FVIFA @7% 6 years = $1727*7.654 = $13218 4) Future value = $1727*FVIF @ 7% 4 years = $1727*1.3108 = $2263.74

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