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Request Description

1A. (Compound interest) To what amount will the following investments accumulate?

a. $5,000 invested for 10 years at 10 percent compounded annually

b. $8,000 invested for 7 years at 8 percent compounded annually

c. $775 invested for 12 years at 12 percent compounded annually

d. $21,000 invested for 5 years at 5 percent compounded annually

5-4A. (Present value) What is the present value of the following future amounts?

a. $800 to be received 10 years from now discounted back to the present at 10 percent

b. $300 to be received 5 years from now discounted back to the present at 5 percent

c. $1,000 to be received 8 years from now discounted back to the present at 3 percent

d. $1,000 to be received 8 years from now discounted back to the present at 20 percent

5-5A. (Compound annuity) What is the accumulated sum of each of the following streams of payments

a. $500 a year for 10 years compounded annually at 5 percent

b. $100 a year for 5 years compounded annually at 10 percent

5-6A. (Present value of an annuity) What is the present value of the following annuities?

a. $2,500 a year for 10 years discounted back to the present at 7 percent

b. $70 a year for 3 years discounted back to the present at 3 percent

c. $280 a year for 7 years discounted back to the present at 6 percent

d. $500 a year for 10 years discounted back to the present at 10 percent

Solution Description

1A. (Compound interest) To what amount will the following investments accumulate? | Principle | Interest | Periods | Interest | Total Amount | |

a. $5,000 invested for 10 years at 10 percent compounded annually | $ 5,000.00 | 10% | 10 | $ 5,000.00 | $ 10,000.00 | |

b. $8,000 invested for 7 years at 8 percent compounded annually | $ 8,000.00 | 8% | 7 | $ |