Question and answer
3. Computing the Time Value of Money. Using time value of money tables, calculate the following. a. The future value of $450 six years from now at 7 percent. b. The future value of $800 saved each
year for 10 years at 8 percent. c. The amount a person would have to deposit today (present value) at a 6 percent interest rate to have $1,000 five years from now. d. The amount a person would have to deposit today to be able to take out $500 a year for 10 years from an account earning 8 percent.
The answer is a. The future value of $450 six years from now at 7 percent.
Expert answered|bongche|Points 1674|
Question
Asked 4/22/2012 12:52:27 AM
Updated 4/17/2013 4:55:36 PM
1 Answer/Comment
Get an answer
New answers
Rating
0
Solution:
F = P (1 + i)^n
a. The future value of $450 six years from now at 7 percent.

F = 450 * 1.07^6 = $ 675.33

b. The future value of $800 saved each year for 10 years at 8 percent.
each year saving, A = $800
F = A[(1+i)^n - 1]/i = 800 [1.08^10 -1]/ 0.08 = $11,589.25

c. The amount a person would have to deposit today (present value) at a 6 percent interest rate to have $1,000 five years
from now.
F = P(1+i)^n
1000 = P* 1.06^5
P = $747.26 (the present value)

d. The amount a person would have to deposit today to be able to take out $500 a year for 10 years from an account earning
8 percent

P(1+i)^n = A[(1+i)^n - 1]/i
P * 1.08^10 = 500 [1.08^10 -1]/0.08
P = $15,637.70 (amount to be deposited today)
Added 4/17/2013 4:55:36 PM
Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
17,919,615 questions answered
Popular Conversations
what is micro
Weegy: A microorganism is a microscopic organism, which may be a single cell or multicellular organism. User: what ...
10/21/2014 7:38:45 PM| 3 Answers
Solve the inequality. 2(4 + x) > 4(x + 4) A. x > 4 B. x > ...
Weegy: 2w + 3 > 14; 2w > 14 - 3; 2w > 11; w > 11/2 User: Solve the inequality. 5a + 12 6 B. a < 6 C. D.
10/21/2014 12:59:56 PM| 3 Answers
Anime
10/21/2014 9:41:19 AM| 2 Answers
what are quadratic equations
Weegy: You can apply quadratic equation to cook marshmallows by following these steps: 1. Select a quadratic ...
10/21/2014 10:48:49 AM| 2 Answers
What is the solution set of 2x ^2 - 3x = 5?
10/21/2014 11:05:05 AM| 2 Answers
Simplify -(-2a + 13) + (-9a - 2) - (-7a - 3).
Weegy: -(-2a + 13) + (-9a - 2) - (-7a - 3) = (-7a - 15) - (-7a - 3) = -12
10/21/2014 11:12:50 AM| 2 Answers
Determine the solution set of (x + 1)2 = 25. {-8, 6} {-8, ...
Weegy: The answer is 77,520. There are 77,520 possible committees that can be formed.
10/21/2014 11:18:30 AM| 2 Answers
Simplify (x - y + 1) - (x + y - 1).
Weegy: (x - 4)(x + 3) = x^2 + 3x - 4x - 12 = x^2 - x - 12
10/21/2014 11:19:54 AM| 2 Answers
Solve the inequality 4x User: x + 1/2 < 1/4
10/21/2014 11:27:18 AM| 2 Answers
Simplify p(p - q) - q(q - p).
Weegy: 3 - (2 - 8) = 3 - (-6) = 3 + 6; = 9
10/21/2014 11:46:35 AM| 2 Answers
Social welfare User: stigma
10/21/2014 12:28:06 PM| 2 Answers
Weegy Stuff
S
L
1
1
1
1
L
1
L
Points 2267 [Total 14642]| Ratings 0| Comments 2267| Invitations 0|Offline
S
L
1
L
P
C
1
P
C
1
L
Points 1464 [Total 10945]| Ratings 3| Comments 1434| Invitations 0|Offline
S
1
L
1
L
P
P
L
Points 781 [Total 13010]| Ratings 0| Comments 781| Invitations 0|Offline
S
L
Points 487 [Total 1886]| Ratings 0| Comments 487| Invitations 0|Offline
S
Points 479 [Total 479]| Ratings 0| Comments 449| Invitations 3|Offline
S
1
L
L
Points 474 [Total 6268]| Ratings 3| Comments 444| Invitations 0|Offline
S
Points 352 [Total 353]| Ratings 4| Comments 312| Invitations 0|Offline
S
Points 207 [Total 207]| Ratings 1| Comments 197| Invitations 0|Offline
S
P
C
L
P
L
1
Points 48 [Total 6282]| Ratings 0| Comments 48| Invitations 0|Offline
S
Points 27 [Total 27]| Ratings 0| Comments 27| Invitations 0|Offline
Home | Contact | Blog | About | Terms | Privacy | Social | ©2014 Purple Inc.