Question

Special Instructions for Questions 17-20: Use the factors below to answer the following questions. A rate...

Special Instructions for Questions 17-20:

Use the factors below to answer the following questions. A rate of 12%, compounded annually, applies to all four questions.

Future Value Single for 3 period at 12%:    1.405

Future Value Annuity for 3 period at 12%:  3.374

Present Value Single for 3 period at 12%:   0.712

Present Value Annuity for 3 period at 12%: 2.402

17. What amount must be deposited in the bank today to grow to $750 in three years?

a. $551.47

b. $253.05

c. $180.15

d. $534.00

18. A deposit of $200 made at the end of each year for three years would grow to how much?

a. $674.80

b. $480.40

c. $142.40

d. $281.00

19. A deposit of $500 would grow to how much at the end of three years?

a. $1,687.00

b. $356.00

c. $1,201.00

d. $702.50

20. What amount must be deposited in the bank today to be able to withdraw $400 at the end of each year for the next three years?

a. $284.80

b. $960.80

c. $1,349.60

d. $562.00
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Homework Answers

Answer #1

Answers to the above questions are:

17. Option D is correct ie $ 534.00.

Calculation :

= FV * PV Single for 3 years

= $750 * 0.712

= $ 534.00

18. Option A is correct ie $ 674.80

Calculation :

= PV * FV Annuity for 3 Years

= $ 200 * 3.374

= $ 674.80

19. Option D is correct ie $702.5

Calculation :

= PV * FV Single for 3 Years

= $500 * 1.405

= $ 702.5

20. Option B is correct ie $ 960.80

Calculation :

= FV * PV Annuity for 3 years

= $ 400 * 2.402

= $ 960.80

Note: For any query, feel free to ask in the comment section!

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