10:23 a savstate.view.usg.edu FINC3155 Business Finance Homework 4-Time Value of

Question

10:23 a savstate.view.usg.edu FINC3155 Business Finance Homework 4-Time Value of Money Find the future value of today's $500 in 5 years under each of the following conditions: a 5% nominal rate, annual compounding 8% nominal rate, annual compounding ' 10% nominal rate, annual compounding Find the present value of $10,000 in 5 years under each of the following conditions: a 6% nominal rate, annual compounding 10% nominal rate, annual compounding 12% nominal rate, annual compounding Find the present value of the following ordinary annuitics $400 per year for 10 years at 10% $200 per year for 5 years at 5% '$400 per year for 5 years at 3% Find the future value of the following ordinary annuities .$400 per year for 10 years at 10% $200 per year for 5 years at 5% $400 per year for 5 years at 3%

Explanation / Answer

1

=500*(1+5%)^5=$638.14

=500*(1+8%)^5=$734.66

=500*(1+10%)^5=$805.26

2

=10000*1/(1+6%)^5=7472.58

=10000*1/(1+10%)^5=6209.21

=10000*1/(1+12%)^5=5674.27

3

=400*(1-(1+.10)^(-10))/.10=2457.83

=200*(1-(1+.05)^(-5))/.05=865.90

=400*(1-(1+.03)^(-5))/.03=1831.88

4

=400*((1+.10)^(10)-1)/.10=6374.97

=200*((1+.05)^(5)-1)/.05=1105.13

=400*((1+.03)^(5)-1)/.03=2123.65

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