Time Value of Money 1. What is a single payment of $10,000 worth ten and 20 year

Question

Time Value of Money

1.         What is a single payment of $10,000 worth ten and 20 years from today if the nominal interest rate is 5% and 10%?

5%/10 years    _______            5%/20 years    _______

                        10%/10 years    _______            10%/20 years    _______

2.         What is a series of annual payments of $10,000 worth ten years from today if the nominal interest rate is 5% and 10% assuming payments are received on January 1 of each year (an annuity due)?

                        5%      _______

                        10%      _______

Explanation / Answer

1.

value (5%/10 years)=10000*1.05^10=16288.95

value (10%/10 years)=10000*1.10^10=25937.42

value (5%/20 years)=10000*1.05^20=26532.98

value (10%/20 years)=10000*1.10^20=67275

the above is the answers

we do only one question based on Chegg rule.

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