Question

1.What is the future value of $2,500 invested today at 12% interest in 5 years with interest compounded quarterly? (show workout)

$4,515.28

$4,552.15

$1,384.19

$4,405.85   

$4,031.50

2.What is the present value of $13,500 received 5 years from now using a 16% interest or discount rate, with interest compounded daily? (Show workout)

$6,223.44

$6,161.22

$5,230.18

$30,039.54

$6,067.00

3.

Assume that you are a saver, and use coupons. Each week you save $5.00 using coupons, and save the money for your retirement. What is the future value of $5.00 (five dollars) deposited at the beginning of each week for 45 years earning 10% interest? (Show workout)

$7,052.15

$230,435.33

$298,538.23

$230,878.47

$3,594.52

Answer 1

1)	Future Value	=	Amount*(1+rate)^time
		Amount	=	$2,500
		Time	=	5years*4 quarters a year= 20 quarters
		rate	=	12% per annum or 12%/4 =3% per quarter
	Future Value	=	$2,500*(1+0.03)^20
			=	$2,500**(1.03)^5
			=	$2,500*1.806111
			=	$      4,515.28
	`
	The answer is $4515.28
2)	Present value	=	Amount/(1+rate)^time
		Amount	=	$13,500
		Time	=	5years*365 days a year=1825
		rate	=	16 % per annum 0r 16%/365 =0.0438356% per day
	Present value	=	$13,500/(1+0.000438356)^1825
			=	$13,500/(1.000438356)^1825
			=	$13,500/2.22515
			=	$                                                 6,067.01
	The answer is $6067
3)	Future value of annuity due	=	Amount*(1+r)*[{(1+r)^n-1}/r]
		amount	=	$5
		Time	=	45 years*52 weeks a year=2340
		Rate	=	10% per annum or 10%/52=0.1923076% per week
	Future value of annuity due	=	$5 *(1+0.001923076)*[{(1+0.001923076)^2340 -1}/0.001923076]
			=	$5*1.001923076*[{(1.001923076)^2340 -1}/0.001923076]
			=	$5.009615*[{89.62878-1}/0.001923076}
			=	$5.009615*46086.99
			=	$230,878.47
		The answer is $230878.47
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