Question

Each of the following situations is independent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided.)

Case	Present Value	Annuity	Future Value	Annual Interest Rate	Number of Years
A	$190,000	−	(i)	5%	7
B	(ii)	−	$190,000	6%	6
C	(iii)	$3,800	−	4%	10
D	−	$4,800	(iv)	5%	20

Required:
Compute the missing amounts for (i) through (iv). (Round your answers to nearest hundred dollars.)

(i)
(ii)
(iii)
(iv)

Answer 1

Ans:

(I) Present Value* FV of $1(i%,n)= Future Value

190,000* FV of $1(5%,7)= Future Value

190,000*1.41= Future Value

Future Value= 267,900

(II) Present Value= Future Value*PV of $1(i%,n)

=> 190,000*PV (6%,6)

=> 190,000*0.71

Present Value = 134,900

(iii) Present Value= Annuity*PVA of $1(i%,n)

Present Value= 3,800*PVA(4%,10)

Present Value= 3,800*8.1109

Present Value= 30,821.42

(iv) Future Value= Annuity*FVA of $1(i%,n)

Future Value= 4,800*FVA(5%,20)

Future Value= 4,800*33.066

Future Value= 158,716.80