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#3
Derek will deposit $1,897.00 per year for 14.00 years into an account that earns 11.00%. Assuming the first deposit is made 6.00 years from today, how much will be in the account 39.00 years from today?
#4
What is the value today of receiving $2,065.00 per year forever? Assume the first payment is made next year and the discount rate is 9.00%.
#5
What is the value today of receiving $2,155.00 per year forever? Assume the first payment is made 9.00 years from today and the discount rate is 10.00%.
#6
Suppose you deposit $2,609.00 into an account today that earns 15.00%. In 5.00 years the account will be worth $________.
#3
Future Value Annuity =
r = 0.11
n = 14 years
=
= 57090.0594528
Now value after 39 years will be
= 57090.0594528 * (1+r)^n
r = 0.11
n = 19
= 57090.0594528 * (1+0.11)^20
= 460277.84
Value after 39 years will be $460277.84
#4
Present Value = Annual Cash Flow / Discount Rate
= 2065 / 0.09
= 22944.44
#5
Present Value after 9 years = Annual Cash Flow / Discount Rate
= 2155 / 0.10
= 21550
Present value today = 21550 / (1+0.10)^9
= 9139.30
#6
Future Value = present Value * (1+r)^n
= 2609 * (1+0.15)^5
= 5247.63
(1+r)" – 1 Periodic Payment * r
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