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Homework answers / question archive / Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided
Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dollar.) a. How much would you have to deposit today if you wanted to have $42,000 in three years? Annual interest rate is 10%. b. Assume that you are saving up for a trip around the world when you graduate in two years. If you can earn 6% on your investments, how much would you have to deposit today to have $10,500 when you graduate? (Round your answer to 2 decimal places.) c-1. Calculate the future value of an investment of $499 for ten years earning an interest of 9%. (Round your answer to 2 decimal places.) C-2. Would you rather have $499 now or $1,000 ten years from now? d. Assume that a college parking sticker today costs $62. If the cost of parking is increasing at the rate of 6% per year, how much will the college parking sticker cost in seven years? (Round your answer to 2 decimal places.) e. Assume that the average price of a new home is $110,000. If the cost of a new home is increasing at a rate of 7% per year, how much will a new home cost in eight years? (Round your answer to 2 decimal places.) f. An investment will pay you $5,500 in 10 years, and it will also pay you $210 at the end of each of the next 10 years (years 1 thru 10). If the annual interest rate is 6%, how much would you be willing to pay today for this type of investment? (Round your intermediate calculations and final answer to the nearest whole dollar.) g. A college student is reported in the newspaper as having won $6,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $6 million now. Instead she will receive $300,000 at the end of the year for each of the next 20 years. If the annual interest rate is 7%, what is the present value (today's amount') that she won? (ignore taxes). (Round your answer to nearest whole dollar.) a Present value b. Present value C-1. Future value c-2. Would you rather have $499 now or $1,000 ten years from now? d. Future value e Future value f Present value 9 Present value
| a) Present value | $31555 |
| b)Present value | $9345 |
| C1) Future value | $1181.33 |
| C2) 499 not or $1000 in 10 year | $499 now |
| d) future value | $93.22 |
a. Formula for Present value
PV = FV /( 1+r)n
where PV is present value required today
Fv is the future value =42000
r = rate of interest or discounting rate =10% =0.1
n = number of year =3
PV = 42000 (1+0.1)3
=42000×0.7513...( check PV table of $1 of 10%, 3rd year )
=31554.6 ie $31555 ( rounded to nearest $)
b) from above formula only
PV =10500/(1+0.06)2
=10500×0.8900
=$9345 to deposit today to have $10500 after 2 year
c1) Formula for Future value = PV ( 1+r)n
FV = 499 (1+0.09)10 (check future value table for 10th year at interest rate of 9% )
=499×2.3674 .....(please check your table upto what decimal iti is given)
=$1181.33
c2) $499 now , as it will give us $1181 in 10 year which is more than what we get if we take $1000 in future.
d) Here we have to find future value of ticket increasing at the rate of 6% per annum for 7 years
FV = 62 (1+0.06)7
=62*1.5035 (Check fV table for $1 for 6% , factor of 7 yr)
=$93.22 (rounded to nearest $)
Sorry as per guidline i can provide only answer for 4 subpart ,
and if any answer comes wrong please confirm pV factor and FV factor decimal in a comment section , as i have taken factors upto 4 decimal.
