Question

# A1.If you deposit \$12,000 in a bank account that pays 10% interest annually, how much will...

A1.If you deposit \$12,000 in a bank account that pays 10% interest annually, how much will be in your account after 7 years?

A2. What is the present value of a security that will pay \$10,000 in 20 years at an interest rate of 8%?

A3. Find the future value of the following ordinary annuities: a. \$600 per year for 10 years at 10% b. \$300 per year for 5 years at 5% c. \$600 per year for 5 years at 0%

A4. Find the present value of the following ordinary annuities:

a. \$600 per year for 10 years at 10%

b. \$300 per year for 5 years at 5%

c. \$600 per year for 5 years at 0%

PLEASE RESPOND WITH COPY AND PASTE, NOT ATTACHMENT USE ORIGINAL CONTENT NOT USED BEFORE ON CHEGG

1) FV = PV x (1 + r)^n = 12,000 x (1 + 10%)^7 = \$23,384.61

2) PV = FV / (1 + r)^n = 10,000 / (1 + 8%)^20 = \$2,145.48

3) Future Value can be calculated using FV function on a calculator

a. N = 10, PMT = 600, I/Y = 10%, PV = 0 => Compute FV = \$9,562.45

b. N = 5, PMT = 300, I/Y = 5%, PV = 0 => Compute FV = \$1,657.69

c. N = 5, PMT = 600, I/Y = 0%, PV = 0 => Compute FV = \$3,000.00

4) Present Value can be calculated using PV funtion

a. N = 10, PMT = 600, I/Y = 10%, FV = 0 => Compute PV = \$3,686.74

b. N = 5, PMT = 300, I/Y = 5%, FV = 0 => Compute PV = \$1,298.84

c. N = 5, PMT = 600, I/Y = 0%, FV = 0 => Compute PV = \$3,000.00

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