5-2. (Compound interest). To what amount will the following investment accumulate?
$6,000 invested for 12 years at 12 percent compounded annually
Where,
$7,500 invested for 8 years at 8 percent compounded annually
$6,400 invested for 10 years at 10 percent compounded annually
$22,000 invested for 6 years at 6 percent compounded annually
Alternatively, the FV for these investments can be calculated using excel.
|
Investment |
Period (years) |
Interest |
FV |
|
$6,000 |
12 |
12% |
$23,375.86 |
|
$7,500 |
8 |
8% |
$13,881.98 |
|
$6,400 |
10 |
10% |
$16,599.95 |
|
$22,000 |
6 |
6% |
$31,207.42 |
5-22 (Present value of an annuity). Suppose you have been offered a few investment opportunities in Estonia. What is the present value of each of the following annuities?
Delegate your assignment to our experts and they will do the rest.
$2,700 a year for 12 years discounted back to present at 6 percent
$75 a year for 2 years discounted back to present at 3 percent
$390 a year for 8 years discounted back to present at 5 percent
$550 a year for 9 years discounted back to present at 9 percent
Alternatively, the PV of the above investments can be calculated using excel.
|
Investment |
Period (years) |
Interest |
PV |
|
$2,700 |
12 |
6% |
$1,341.82 |
|
$75 |
2 |
3% |
$70.69 |
|
$390 |
8 |
5% |
$263.97 |
|
$550 |
9 |
9% |
$253.24 |
