Question

For each of the following situations involving single amounts, solve for the unknown. Assume that interest is compounded annually. (i = interest rate, and n = number of years) (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) (Round your final answers to nearest whole dollar amount.)

Present Value Future Value i n

1. $44,000 9.0% 7

2. $37,026 $57,000 2.0% 11

3. $15,901 $41,000 7.0%

4. $35,417 $110,000 10

5. $15,189 6.0% 14

Answer 1

Answer
Situation	Present value	Future Value	i	n
1	$44,000.00	$80,434.00	9%	7
2	$37,026.00	$57,000.00	2%	11
3	$15,901.00	$41,000.00	7%	14
4	$35,417.00	$110,000.00	12%	10
5	$6,718.00	$15,189.00	6%	14
Situation 1 - Calculation of Future value
Future value = Present value x (1+i)^n
Future value = $44000 x (1+0.09)^7
Future value = $44000 x 1.82804
Future value = $80,434
Situation 3 - Calculation of n i.e. number of years
Future value = Present value x (1+i)^n
$41000 = $15901 x (1+0.07)^n
2.5785 = 1.07^n
n = 14
Situation 4 - Calculation of i i.e. interest rate
Future value = Present value x (1+i)^n
$110000 = $35417 x (1+i)^10
3.105853 = (1+i)^10
i = 12%
Situation 5 - Calculation of present value
Future value = Present value x (1+i)^n
Present value = Future value / (1+i)^n
Present value = $15189 / (1+0.06)^14
Present value = $15189 x 0.44230
Present value = $6718