* The values must be shown that were used when entered ifusing a calculator to s
ID: 2771035 • Letter: #
Question
* The values must be shown that were used when entered ifusing a calculator to solve the problem. * The question did not come out of any book it came out of theteachers head. 1. What is the future value of $100 after 3 years if it earns10% compounded annually? What is the present value of $100 to bereceived in 3 years if the interest rate is 10%, compoundedannually? * The values must be shown that were used when entered ifusing a calculator to solve the problem. * The question did not come out of any book it came out of theteachers head. 1. What is the future value of $100 after 3 years if it earns10% compounded annually? What is the present value of $100 to bereceived in 3 years if the interest rate is 10%, compoundedannually?Explanation / Answer
FV=P(1+r)t........where FV is future value....P ispresent value.......r=rate/100 and t=number of years :FV=100(1.1)3=100(1.331)=133.10 :
100=PV(1.1)3 :
PV=100/1.331=75.13 :
PV=100/1.331=75.13
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