Question:
For each of the following situations involving single amounts, solve for the unknown (?). Assume that
interest is compounded annually. ( i = interest rate, and n = number of years)
Answer:
1. PV = $40,000 (.62092) = $24,837
Present value of $1: n = 5, i = 10% (from Table 2)
2. $36,289 = .55829
$65,000
Present value of $1: n = 10, i = ? (from Table 2, i = approximately 6%)
3. $15,884 = .3971
$40,000
Present value of $1: n = ?, i = 8% (from Table 2, n = approximately 12 years)
4. $46,651 = .46651
$100,000
Present value of $1: n = 8, i = ? (from Table 2, i = approximately 10%)
5. FV = $15,376 (3.86968) = $59,500
For each of the following situations involving single amounts, solve for the unknown (?). Assume that
interest is compounded annually. ( i = interest rate, and n = number of years)
Answer:
1. PV = $40,000 (.62092) = $24,837
Present value of $1: n = 5, i = 10% (from Table 2)
2. $36,289 = .55829
$65,000
Present value of $1: n = 10, i = ? (from Table 2, i = approximately 6%)
3. $15,884 = .3971
$40,000
Present value of $1: n = ?, i = 8% (from Table 2, n = approximately 12 years)
4. $46,651 = .46651
$100,000
Present value of $1: n = 8, i = ? (from Table 2, i = approximately 10%)
5. FV = $15,376 (3.86968) = $59,500
