25.) For the case shown in the following table, the present value of the cash fl

Question

25.) For the case shown in the following table, the present value of the cash flow discounted at the rate given and assuming that the cash flow is received at the end of the period noted equals

Single cash flow: 85,000

Discount rate: 13%

End of period (years): 11

a. $326,048.20

b. $22,159.30

c. $483,390.03

d. $1,854,216.90

26.) Using the values below, the future value of the annuity, assuming it is an ordinary annuity equals

Amount of annuity: $4,500

Interest rate: 9%

Deposit period (years): 5

a. $6,923.81

b. $2,924.69

c. $17,503.43

d. $26,931.20

27.) Using the values below, the present value of the annuity, assuming it is an ordinary annuity equals

Amount of annuity: 37,000

Interest rate: 11%

Deposit period (years): 12

a. $240,217.18

b. $840,387.93

c. $129,442.67

d. $10,576.11

28.) For the case shown in the following table, the future value of the single cash flow deposited today at the end of the deposit period if the interest is compounded annually at the rate specified equals

Single cash flow: 27,000

Interest rate: 11%

Deposit period (years) 20

a. $217,682.41

b. $1,733,476.40

c. $3,348.92

d. $215,009.86

Explanation / Answer

25)

PV = 85000/1.13^11 = 22159.30

26)

FV = 4500 * [(1+0.09)^5 -1]/0.09

= 26931.20

27)

PV = 37000 * [1-(1+0.11)^-12]/0.11

= 240217.18

28)

FV = 27000 * (1+0.11)^20

= 217682.41

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