Business, 12.02.2020 00:55 hayleneolide

For each of the following, compute the future value (Do not round intermediate calculations and round your final answers to 2 decimal places. (e. g., 32.16)):

Present Value Years Interest Rate Future Value
$ 2,450 10 14 % $
9,152 8 8
80,355 15 13
187,796 6 5

Answers: 2

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Answers

Answer from: sduhaime1974

1. FV = $9,082.69

2. FV = $16,939.71

3. FV = $502,561.90

4. FV = $251,664.60

Explanation:

Req. 1

Future value is the expected amount of money that will be gained by an individual because of saving the money today.

We know,

Future value, FV = PV × $(1 + i)^{n}$

Here, PV = Present Value = $2,450

i = Yearly interest rate = 14% = 0.14

n = number of period (here, years) = 10

Putting the values,

FV = $2,450 × $(1 + 0.14)^{10}$

or, FV = $2,450 × $1.14^{10}$

or, FV = $2,450 × 3.707221314

Therefore, FV = $9,082.69

Req. 2

Again, Future value, FV = PV × $(1 + i)^{n}$

Here, PV = $9,152

i = Yearly interest rate = 8% = 0.08

n = number of period (here, years) = 8

Putting the values,

FV = $9,152 × $(1 + 0.08)^{8}$

or, FV = $9,152 × $1.08^{8}$

or, FV = $9,152 × 1.85093021

Therefore, FV = $16,939.71

Hence, today's $9,152 amount will receive $16,939.71 if we invest it for 8 years with an annual compounding interest rate of 8%.

Req. 3

Again, Future value, FV = PV × $(1 + i)^{n}$

Here, PV = $80,355

i = Yearly interest rate = 13% = 0.13

n = number of period (here, years) = 15

Putting the values,

FV = $80,355 × $(1 + 0.13)^{15}$

or, FV = $80,355 × $1.13^{15}$

or, FV = $80,355 × 6.254270378

Therefore, FV = $502,561.90

Hence, today's $80,355 amount will receive $502,561.90 if we invest it for 15 years with an annual compounding interest rate of 13%.

Req. 4

Again, Future value, FV = PV × $(1 + i)^{n}$

Here, PV = $187,796

i = Yearly interest rate = 5% = 0.05

n = number of period (here, years) = 6

Putting the values,

FV = $187,796 × $(1 + 0.05)^{6}$

or, FV = $187,796 × $(1.05)^{6}$

or, FV = $187,796 × 1.340095641

Therefore, FV = $251,664.60

We will receive $251,664.60 in the future if we invest $187,796 today with a compounding interest rate of 5% for the next 6 years.

Answer from: Quest

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Answer from: Quest

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explanation:

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