Question

In 1797, Napoleon promised to give one rose bouquet every year to a school. In 1984, how much is the debt? assumed annual IR=5%. a rose bouquet always = 7.5 Fr. 1st rose @ end of 1797; FV calculation @ end of 1984.

1. As of the BEGINNING of 1797, how much should this rose promise (1797-1984) worth?

2. Now let the above answer grow for 1984-1797 years. How much is it as of the END of 1984?

Answer 1

1.

PV at beginning = 149.98 Fr.

Using financial calculator BA II Plus - Input details:	#
I/Y = Rate =	5.000000
PMT =	-7.50
N = Number of years remaining x frequency =	187
FV = Future Value =	$0.00
CPT > PV = Present value =	149.98
Formula based present value of annuity:
PV = |PMT| x ((1-(1+R%)^-N)/R%	149.98

2.

FV at end of 1984 = 1,375,443.72 Fr.

Above is also value of debt

Using financial calculator BA II Plus - Input details:	#
I/Y = Rate/Frequency =	5.000000
PMT = Payment / Frequency =	-7.50
N = Total number of periods =	187.00
PV = Present Value =	0.00
CPT > FV = Future Value =	1,375,443.72
FV = |PMT| x ((1+R%)^N-1)/R%)	1,375,443.72