Question

For the following investment, calculate the present value (principal) and the compound interest. Round your answers to the nearest cent.

Compound Amount |
Term of Investment |
Nominal Rate (%) |
Interest Compounded |
Present Value |
Compound Interest |

$11,500 | 36 months | 2 | semiannually | $ | $ |

Answer #1

**Compound Amount = $11,500**

Term of Investment = 36 months

Nominal Rate = 2%

Interest Compounded: Semi annually

Number of compounding periods per year = 2

In 36 months or 3 years, there are 6 compounding periods.

A = P (1 + i)^{n}

A = $11,500

i = 0.02 / 2 = 0.01

n = 6

11,500 = P (1 + 0.01)^{6}

11,500 = P (1.01)^{6}

11,500 = P * 1.06152

P = 11,500 / 1.06152

P = 10,833.52

**Present Value = $10,833.52**

Compound Interest = Compound Amount – Present Value

Compound Interest = 11,500 - 10,833.52

**Compound Interest = $666.48**

Calculate the present value of the compound interest loan.
(Round your answers to the nearest cent.)
$28,000 after 7 years at 4% if the interest is compounded in the
following ways.
(a) annually
$
(b) quarterly
$

Calculate the present value of the compound interest loan.
(Round your answers to the nearest cent.)
$24,000 after 7 years at 3% if the interest is compounded in the
following ways.
(a) annually
$
(b) quarterly
$

Find the present value (principal) and the compound interest, as
indicated, for each of the following investments. (Hint: Subtract
the present value from the future value to find the compound
interest.) Use a calculator or Table 16-1 or Table 16-2 to find FVF
or PVF. Round answers to the nearest cent. show entire solution
please.
Future Value - Rate - Term - Present Value -
Compound Interest
2. $18,000 - 6% compounded quarterly - 5 years -
_____ -...

1a.)Calculate, to the nearest cent, the present value of an
investment that will be worth $1,000 at the stated interest rate
after the stated amount of time. HINT [See Quick Example 4.]
5 years, at 5.2% per year, compounded weekly (52 times per
year)
1b.) Find the effective annual interest rate r of the
given nominal annual interest rate. Round your answer to the
nearest 0.01%.
13% compounded monthly
1c.) Compute the specified quantity.
You take out a 5 month,...

1.Find the present value of the following ordinary annuities.
Round your answer to the nearest cent.
Amount per Payment
Payment at End of Each
Time (Years)
Rate of Investment
Present Value
$3,300
6 months
8
12%
$
2. Find the amount of the following annuities due and interest
earned. Round your answer to the nearest cent.
Amount of
Each Deposit
Period
Rate
Time
(Years)
Amount of
Annuity
$7,500
quarterly
8%
8
$
3.Find the amount of each payment needed to...

The following investment requires table factors for periods
beyond the table. Create the new table factor rounded to five
places and calculate the present value. Round present value to the
nearest cent.
Click here for Table 11-2
Compound
Amount
Term of
Investment (years)
Nominal Rate
(%)
Interest
Compounded
New Table
Factor
Present
Value
$1,900
12
12
quarterly
$

Business Applications. Find the future value (compound amount)
or the compound
interest, as indicated. Round answers to the nearest cent. Use a
calculator or Table 16-1 to find FVF. Please put the entire
solution for each question. Thank you
16. Brent Davis thinks that he needs to borrow $6,600 for 2.5
years. He doesn’t have a very good credit rating, so most finance
companies want to charge him a high interest rate. He finally finds
a lender that will loan...

Compound interest is computed on the principal and any interest
earned that has not been withdrawn.
Compound interest is computed on the
principal amount plus paid interest.
principal amount plus accrued interest.
principal amount plus earned interest left on deposit.
principal amount only.
_____
Which of the following is false?
Simple interest is generally applicable to long-term
situations.
For the investor, compound interest is more desirable than
simple interest.
Simple interest uses the initial principal to compute interest
in each...

1.)
calculate the present value of annuity. Round answer to the nearest
cent. $1800 monthly at 6.2% for 30 years. *NOTE: i keep getting
293,879.98 which is incorrect.
2.) since 2007, a particular fund returned 13.5% compounded
monthly. How much would a $6000 investment in this phone have been
worth after two years? Round your answer to the nearest cent.
3.) In the following ordinary annuity, the interest is
compounded with each payment, and the payment is made at the...

Present Value Computations
Using the present value tables, solve the following.
Round your answers to two decimal places.
Required:
What is the present value on January 1, 2016, of $30,000 due on
January 1, 2020, and discounted at 10% compounded annually?
What is the present value on January 1, 2016, of $40,000 due on
January 1, 2020, and discounted at 11% compounded semiannually?
What is the present value on January 1, 2016, of $50,000 due on
January 1, 2020, and...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 22 minutes ago

asked 25 minutes ago

asked 28 minutes ago

asked 29 minutes ago

asked 29 minutes ago

asked 51 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago