Question

Problem 1

Find the future value of $100 in 5 years at 5%.

The answer is:

Problem 2

Find the future value of $1,800 in 3 years at 8%.

The answer is:  

Problem 3

Find the future value of $500 in 6 years at 9%.

The answer is:  

Problem 4

Find the future value of a 3-year, $300 per year annuity at 6%.

The answer is:  

Problem 5

Find the future value of a 15-year, $300 per year annuity at 6%.

The answer is:  

Problem 6

How much would you have to deposit now to have $15,000 in 8 years if interest is 7%?

The answer is:  

Answer 1

Future value (FV) = PV (1+i)ⁿ

Where PV = Present value

i = Rate of Interest

n = Number of Years

1. Fv = 100(1+.05)⁵

= 127.628

2. FV = 1800(1+.08)³

= 2267.48

3. FV = 500(1+.09)⁶

  = 838.55

Future Value of Annuity = (A/i) [(1+i)ⁿ - 1]

4. FV of Annuity = (300/6%) [ (1+.06)³-1]

   = 5000 * [ 1.1910 - 1 ]

= 5000 * 0.1910

= 955

5. FV of Annuity = (300/6%) [ (1+.06)¹⁵ - 1]

= 5000 * [2.39656 - 1]

= 5000 * 1.39656

   = 6982.8

Present Value = FV / (1+i)ⁿ

6. PV = 15000 / (1+.07)⁸

= 8730.57