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Q1-FV=C*(1+R)^T
A-10years at 6 percent
Fv=10000*(1+0.06)^10
=17908.48
B-10YEARS at 6 percent
Fv=10000*(1+0.12)^10
31058.48=
c-20years 6percent
fv=10000*(1+0.06)^20
32071.35=
d-A)because the interest earned depends not only
on the interest rate but also on the time the money
is invested in part c the money is the invested for
twice as long 20 years as in part a 10 years
:For Investment Y
PV_Y = $6,100 * [(1 - (1 + 0.05)^(-5)) / 0.05]
Q5-PV = CF / (1 + r)^n
PV = $675 / (1 + 0.10)^1
PV = $675 / 1.10
PV ≈ $613.64
PV = 880 / (1 + 0.10)^2-2
PV = 880 / (1.10)^2
PV = 880 / 1.21
PV ≈ $727.27
.
-3
PV = 985 / (1 + 0.10)^3
PV = 985 / (1.10)^3
PV ≈ 985 / 1.331
PV ≈ $740.2