Single Cash Flow

I. Principal = P 10,000

Interest rate = 5% Period = 10 yrs.

a. Compounded Annually

Year Future value Interest

1 10,500 500
2 11,025 1,025
3 11,576.25 1,576.25
4 12,155.06 2,155.06
5 12,762.82 2,762.82
6 13,400.96 3,400.96
7 14,071 4,071
8 14,774.55 4,774.55
9 15,513.28 5,513.28
10 16,288.95 6,288.95

b. Compounded Semi-Annually

Year Future value Interest

10,250 250
1 10,506.25 506.25
10,768.91 768.91
2 11,038.13 1,038.13
11,314.08 1,314.08
3 11,596.93 1,596.93
11,886.86 1,886.86
4 12,184.03 2,184.03
12,488.63 2,488.63
5 12,800.85 2,800.85
13,120.87 3,120.87
6 13,448.89 3,448.89
13,785.11 3,785.11
7 14,129.74 4,129.74
14,482.98 4,482.98
8 14,845.06 4,845.06
15,216.18 5,216.18
9 15,596.59 5,596.59
15,986.5 5,986.5
15,896.38 5,896.38
10 16,386.16 6,386.16

c. Compounded Quarterly

Year Future value Interest

10,122.72 122.72
10,246.95 246.95
10,372.7 372.7
1 10,500 500
 Single Cash Flow

10,628.86 628.86
10,759.3 759.3
10,891.34 891.34
2 11,025 1,025
11,160.3 1,160.3
11,297.26 1,297.26
11,435.91 1,435.91
3 11,576.25 1,576.25
11,718.32 1,718.32
11,862.13 1,862.13
12,007.7 2,007.7
4 12,155.06 2,155.06
12,304.23 2,304.23
12,455.23 2,455.23
12,608.09 2,608.09
5 12,762.82 2,762.82
12,919.44 2,919.44
13,077.99 3,077.99
13,238.49 3,238.49
6 13,400.96 3,400.96
13,565.42 3,565.42
13,731.89 3,731.89
13,900.42 3,900.42
7 14,071 4,071
14,243.69 4,243.69
14,418.49 4,418.49
14,595.44 4,595.44
8 14,774.55 4,774.55
14,955.87 4,955.87
15,139.41 5,139.41
15,325.21 5,325.21
9 15,513.28 5,513.28
15,703.66 5,703.66
15,896.38 5,896.38
16,091.47 6,091.47
10 16,436.19 6,436.19
d. Compounded monthly

Year Future value Interest

10,041.67 41.67
10,083.51 83.51
10,125.52 125.52
10,167.71 167.71
10,210.08 210.08
10,252.62 252.62
10,295.34 295.34
10,338.24 338.24
10,381.31 381.31
10,424.57 424.57
10,468 468
1 10,511.62 511.62
10,555.42 555.42
10,599.4 599.4
10,643.56 643.56
10,687.91 687.91
10,732.44 732.44
 Single Cash Flow

10,777.16 777.16
10,822.07 822.07
10,867.16 867.16
10,912.44 912.44
10,957.91 957.91
11,003.57 1,003.57
2 11,049.41 1,049.41
11,095.45 1,095.45
11,141.68 1,141.68
11,188.11 1,188.11
11,234.72 1,234.72
11,281.54 1,281.54
11,328.54 1,328.54
11,375.74 1,375.74
11,423.14 1,423.14
11,470.74 1,470.74
11,518.53 1,518.53
11,566.53 1,566.53
3 11,614.72 1,614.72
11,663.12 1,663.12
11,711.71 1,711.71
11,760.51 1,760.51
11,809.51 1,809.51
11,858.72 1,858.72
11,908.13 1,908.13
11,957.75 1,957.75
12,007.57 2,007.57
12,057.6 2,057.6
12,107.84 2,107.84
12,158.29 2,158.29
4 12,208.95 2,208.95
12,259.82 2,259.82
12,310.91 2,310.91
12,362.2 2,362.2
12,413.71 2,413.71
12,465.44 2,465.44
12,517.37 2,517.37
12,569.53 2,569.53
12,621.9 2,621.9
12,674.49 2,674.49
12,727.3 2,727.3
12,780.34 2,780.34
5 12,833.59 2,833.59
12,887.06 2,887.06
12,940.76 2,940.76
12,994.68 2,994.68
13,048.82 3,048.82
13,103.19 3,103.19
13,157.79 3,157.79
13,212.61 3,212.61
13,267.66 3,267.66
13,322.95 3,322.95
13,378.46 3,378.46
13,434.2 3,434.2
6 13,490.18 3,490.18
13,546.39 3,546.39
 Single Cash Flow

13,602.83 3,602.83
13,659.51 3,659.51
13,716.42 3,716.42
13,773.57 3,773.57
13,830.96 3,830.96
13,888.59 3,888.59
13,946.46 3,946.46
14,004.57 4,004.57
14,062.93 4,062.93
14,121.52 4,121.52
7 14,180.36 4,180.36
14,239.45 4,239.45
14,298.78 4,298.78
14,358.35 4,358.35
14,418.18 4,418.18
14,478.26 4,478.26
14,538.58 4,538.58
14,599.16 4,599.16
14,659.99 4,659.99
14,721.07 4,721.07
14,782.41 4,782.41
14,844 4,844
8 14,905.85 4,905.85
14,967.96 4,967.96
15,030.33 5,030.33
15,092.96 5,092.96
15,155.84 5,155.84
15,218.99 5,218.99
15,282.4 5,282.4
15,346.08 5,346.08
15,410.02 5,410.02
15,474.23 5,474.23
15,538.71 5,538.71
15,603.45 5,603.45
9 15,668.47 5,668.47
15,733.75 5,733.75
15,799.31 5,799.31
15,865.14 5,865.14
15,931.24 5,931.24
15,997.62 5,997.62
16,064.28 6,064.28
16,131.22 6,131.22
16,198.43 6,198.43
16,265.92 6,265.92
16,333.7 6,333.7
16,401.75 6,401.75
10 16,470.09 6,470.09
 Single Cash Flow

2.

a.

Desired future value: 10000

Interest rate: 0.08

Number of years: 1
Result: $9,259.25

b.

Desired future value: 10000

Interest rate: 0.08

Number of times 12
compounded each
year:
Number of years: 1
Result: $9,233.61

c.

Desired future value: 10000

Interest rate: 0.08

Number of years: 2
Result: $8,573.38

d.

Desired future value: 10000

Interest rate: 0.08

Number of times 2
compounded each
year:
Number of years: 2
Result: $8,548.04

e.

Desired future value: 10000

Interest rate: 0.08

Number of years: 10
Result: $4,631.93
 Single Cash Flow

f.

Desired future value: 10000

Interest rate: 0.08

Number of times 4
compounded each
year:
Number of years: 10
Result: $4,528.90

3.

Investment: 40000

Interest rate: 0.12

Number of times compounded each year: 4

Number of years: 3

Result: Php 57,030.43

4.

Investment: 27811.33

Interest rate: 0.1080

number of times compounded each year:24

Number of years: 9

Result: $73,351.50

5.

Solved using table for PV of 1

FV = PV (N);i

a.)

r = (FV/PV)(1/n) − 1

$180 = $100 (6 yrs x 4 quarters) ; I =?

$180 /$100= 24 ; i=?

1.8 = 24 ; i= 2%

b.)

$180 = $100 (6 yrs x 12months) ; I =?

$180/ $100= 72 ; i=?

1.8 = 72 ; i = 3%

c.)

$180 = $100 (6 yrs x 4 quarters) ; I =?

$161/ $100= 24 ; i=?

1.610 = 24 ; i = 2%
 Single Cash Flow

d.)

$634 = $500 (12 months) ; I =?

$634/ $500= 12; i=?

1.268 = 24 ; i = 1%

e.)

$240 = $150 (2 yrs x 4 quarters) ; I =?

$240/ $150= 8; i=?

1.6 = 24 ; i = 2%

6.

Solved using table for PV of 1

FV = PV (N);i

a.)

$800 = $500 (5 yrs x 2) ; I =?

$800/ $500 = 10; i=?

1.6 = 10 ; i = 5%

7.

Future Value (FV): 10000

Number of Periods (t): 2

Interest Rate (R): % 6.25

Compounding (n): 12

Present Value (PV) of the Future Sum =

$ 8,827.83

8.

a.)

n = ln(FV / PV)ln(1 + r)

Present Value (PV) of the Future Sum

= $ 900

Future Value (FV): $600

Interest Rate (R): % 8

Compounding (n): 2

Number of Periods (t)= 5 years (rounded)

 Single Cash Flow

b.)

n = ln(FV / PV)ln(1 + r)

Present Value (PV) of the Future Sum

= $ 700

Future Value (FV): $1000

Interest Rate (R): % 8

Compounding (n): 4

Number of Periods (t) = 2.2 years (rounded)

c.)

n = ln(FV / PV)ln(1 + r)

Present Value (PV) of the Future Sum

= $ 787

Future Value (FV): $1000

Interest Rate (R): % 8

Compounding (n): 12

Number of Periods (t) = 3 years (rounded)

9.

Future Value ($): $15,000

Discount / Inflation Rate (%): 6.25

Number of Years: 3

Compound Interval: quarterly

Net Present Value: $12,453.48

10.

r = (FV/PV)(1/n) − 1

Present Value (PV) of the Future Sum

= $ 500

Future Value (FV): $634

Compounding (n): 12

Number of Periods (t) = 3 years

Nominal annual interest rate: 11.931 %

Effective annual interest rate: 12.6055 %

 Single Cash Flow

11.

Future Value ($): $1,464

Discount / Inflation Rate (%): 10

Number of Years: 4

Compound Interval: Annually

Net Present Value: $999.93 / $1,000

12.

Present Value (PV): $8000

Interest Rate (r): 8

Compounding: semi-annual

Periods (n): 7

Future Value (FV): $13,853.41

13.

Present Value (PV): $21,000

Interest Rate (r): 18

Compounding: Monthly

Periods (n): 5

Future Value (FV): $51,307.62

14.

Present Value (PV): P 100

Future Value (FV): P 161

Compounding: Annual

Periods (n): 6

Interest Rate (r): 8.261 %

15.

Present value: 500

Future value: 669

Number of years: 5

Compounded: Annually

Nominal annual interest rate: 5.9964%

Effective annual interest rate: 5.9964%

 Single Cash Flow

16.

n = ln(FV / PV)ln(1 + r)

Present Value (PV): $50

Future Value (FV): $78.76

Interest Rate (r): 2

Compounding: Semi-Annual

Periods (n): 22.83 yrs. /23 yrs.

17.

n = ln(FV / PV)ln(1 + r)

Present Value (PV): $100

Interest Rate (r):20

Compounding: Semi-annual

Future Value (FV): 298.60

Periods (n): 5.74

Semi-annuals: 11.48/ 12 Semi-annuals

18.

n = ln(FV / PV)ln(1 + r)

Present Value (PV): $600

Future Value (FV): $900

Interest Rate (r): 8

Compounding: Semi-annual

Periods (n): 5.17yrs.

19.

n = ln(FV / PV)ln(1 + r)

Present Value (PV): 700

Interest Rate (r): 8

Compounding: Quarterly

Future Value (FV):1000

Periods (n): 4.5 yrs.

 Single Cash Flow

Additional Problems

1. 4.

Present Value (PV): $20,000 r = (FV/PV)(1/n) − 1

Future Value (FV): $30,000 Present Value (PV): $200

Interest Rate (r): 7 Interest Rate (r): 18.369

Compounding: Semi-annual Compounding: Monthly

Periods (n): 5.89 yrs. / 6 yrs. Periods (n): 5

Future Value (FV): $497.60

2.

PV = FV(1+r)n 5.

Future Value (FV): $800 PV = FV(1+r)n

Interest Rate (r): 10 Future Value (FV): $1,000

Periods (n):10 Interest Rate (r): 10

Present Value (PV): $308.43 Periods (n): 30

Present Value (PV): $57.31

3.

FV = PV (1+r)n 6.

Present Value (PV): $6,000 r = (FV/PV)(1/n) − 1

Interest Rate (r): 6 Present Value (PV):500

Compounding: Quarterly Future Value (FV):1080

Periods (n): 5 Compounding: ⇒ 8.005%

Future Value (FV): $8,081.13 Periods (n):10

Interest Rate (r): 8.005%/ 8%