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If you invest $29,000 at 10% interest, how much will you have in 10 years? Use A

ID: 3197467 • Letter: I

Question

If you invest $29,000 at 10% interest, how much will you have in 10 years? Use Appendix A. (Round "FV Factor" to 3 decimal places.)

$75,226

$40,194

$11,194

$129,998

How much must you invest at 12% interest in order to see your investment grow to $26,000 in 14 years? Use Appendix B. (Round "PV Factor" to 3 decimal places.)

$4,696

$5,330

$4,731

none of these

To save for her newborn son's college education, Lea Wilson will invest $19,000 at the beginning of each year for the next 15 years. The interest rate is 10 percent. What is the future
value? Use Appendix C. (Round "FV Factor" to 3 decimal places.)

$79,363.

$664,050.

$683,050.

$636,541.

Ambrin Corp. expects to receive $3,000 per year for 11 years and $4,500 per year for the next 11 years. What is the present value of this 22 year cash flow? Use an 7% discount rate. Use Appendix D and Appendix B. (Round "PV Factor" to 3 decimal places. Round your intermediate calculations to the nearest dollar value.)

rev: 11_23_2017_QC_CS-110317

$38,526

$49,775

$56,243

none of these

If you invest $29,000 at 10% interest, how much will you have in 10 years? Use Appendix A. (Round "FV Factor" to 3 decimal places.)

Explanation / Answer

If you invest $29,000 at 10% interest, how much will you have in 10 years?

Amount = 29000( 1 + 10/100 )^10 = 75218 [nearest : 75226]

How much must you invest at 12% interest in order to see your investment grow to $26,000 in 14 years?

Principal = 26000 / ( 1 + 12/100 )^14 = 5320 [nearest: 5330]

To save for her newborn son's college education, Lea Wilson will invest $19,000 at the beginning of each year for the next 15 years. The interest rate is 10 percent. What is the future value?

Amount = 19000(1.1)^15 + 19000(1.1)^14 + .. + 19000(1.1) = 664045 [nearest: 664050]

Ambrin Corp. expects to receive $3,000 per year for 11 years and $4,500 per year for the next 11 years. What is the present value of this 22 year cash flow? Use an 7% discount rate.

Present Value = 3000(0.93)^22 + 3000(0.93)^21 + .. 3000(0.93)^12 + 4500(0.93)^11 + 4500(0.93)^10 + .. 4500(0.93)^1 = 42741 [none of these]

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