f you invest $16,500 today, how much will you have in each of the following inst
ID: 2819217 • Letter: F
Question
f you invest $16,500 today, how much will you have in each of the following instances? Use Appendix A as an approximate answer, but calculate your final answer using the formula and financial calculator methods.
a. In 12 years at 11 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Present Value___
b. In 15 years at 8 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Present Value___
c. In 25 years at 6 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Present Value___
d. In 20 years at 6 percent (compounded semiannually)? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Present Value___
Explanation / Answer
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
1.
A=$16500*(1.11)^12
=$16500*3.498450597
=$57724.43(Approx).
2.A=$16500*(1.08)^15
=$16500*3.172169114
=$52340.79(Approx).
3.
A=$16500*(1.06)^25
=$16500*4.29187072
=$70815.87(Approx).
4.
We use the formula:
A=P(1+r/200)^2n
where
A=future value
P=present value
r=rate of interest
n=time period.
Hence
A=$16500(1+0.06/2)^(2*20)
=$16500*3.262037792
=$53823.62(Approx).
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