Question

Complete the table below. (Note: Round off your answers to the nearest hundredths. Don't use comma)

Ra	r	m	t	Present Value
P 1,100	8%	annually	20 years
P 2,200	9%	semi - annually	15 years
P 3,300	10%	quarterly	10 years
P 4,400	11%	monthly	5 years
P5,500	12%	annually	5 years

Answer 1

Case 1

Given Future Value = 1100

Rate of interest =8 % Compounding Annually

Time = 20Years

No.of Compounding Periods = 20*1= 20

Future Value = Present Value ( 1+i)^n

Here i= Rate of Interest

n = No.of Years

1100 = Present Value ( 1+0.08)^20

1100 = Present value ( 1.08)^20

1100= Present Value * 4.6610

1100/4.6610 = Present value

236 = Present value

Case 2

Given Future Value = 2200

Rate of interest =9 % Compounding Semiannually

Time = 15Years

No.of Compounding Periods = 15*2= 30

Future Value = Present Value ( 1+i/2)^2n [ Interest is compounded semi Annualy]

Here i= Rate of Interest

n = No.of Years

2200 = Present Value ( 1+0.09/2)^2*15

2200 = Present value ( 1.045)^30

2200= Present Value * 3.7453

2200/3.7453 = Present value

587.40 = Present value

Case 3

Given Future Value = 3300

Rate of interest =10 % Compounding Quarterly

Time = 10 Years

No.of Compounding Periods = 10*4=40

Future Value = Present Value ( 1+i/4)^4n [ Interest is compounded Quarterly]

Here i = Rate of Interest

n = No.of Years

3300 = Present Value ( 1+0.10/4)^4*10

3300 = Present value ( 1.025)^40

3300= Present Value * 2.6851

3300/2.6851 = Present value

1229 = Present value

Case 4

Given Future Value = 4400

Rate of interest =11 % Compounding Monthly

Time = 5 Years

No.of Compounding Periods =5*12= 60

Future Value = Present Value ( 1+i/12)^12n [ Interest is compounded Monthly]

Here i = Rate of Interest

n = No.of Years

4400= Present Value ( 1+0.11/12)^12*5

4400 = Present value ( 1.009167)^60

.4400= Present Value * 1.72895

4400/1.72895= Present value

2544.897 = Present value

Case 5:

Given Future Value = 5500

Rate of interest =12% Compounding Annually

Time = 5 Years

No.of Compounding Periods =5*1=5

Future Value = Present Value ( 1+i)^n [ Interest is compounded Annually]

Here i = Rate of Interest

n = No.of Years

5500= Present Value ( 1+0.12)^5

5500= Present value ( 1.12)^5

5500= Present Value * 1.7623

5500/1.7623= Present value

3120.922 = Present value

Ra	r	m	t	Present Value
P 1,100	8%	annually	20 years	236
P 2,200	9%	semi - annually	15 years	587.4
P 3,300	10%	quarterly	10 years	1229
P 4,400	11%	monthly	5 years	2544.897
P5,500	12%	annually	5 years	3120.922

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