Question

Determine the future value and the present value of the following single amounts:

Future and Present Values

item	Invested Amount	Interest Rate Percentage	No. of Periods
1	15,000.00	6	12
2	20,000.00	8	10
3	30,000.00	12	20
4	50,000.00	4	12

Answer 1

determine the future value and present value

Future value = Principal + Interest

Principal	IR	Years	Cash inflows	Future value	Present Value factor	Present value of cash inflows
15,000	6%	1	900	15,900	0.943	849
15,900	6%	2	954	16,854	0.89	849
16,854	6%	3	1011.24	17,865	0.84	849
17865.24	6%	4	1071.914	18,937	0.792	849
18937.15	6%	5	1136.229	20,073	0.747	849
20,073	6%	6	1204.403	21,278	0.705	849
21277.79	6%	7	1276.667	22,554	0.665	849
22554.45	6%	8	1353.267	23,908	0.627	848
23907.72	6%	9	1434.463	25,342	0.592	849
25342.18	6%	10	1520.531	26,863	0.558	848
26862.72	6%	11	1611.763	28,474	0.527	849
28,474	6%	11	1708.469	30,183	0.497	849

Present value of cash inflows = cash inflows * Present value factor

The present value for all the future values should be 15,000

For 20,000

Principal	IR	Years	Cash inflows	Future value	Present Value	Present value of cash inflows
20,000	8%	1	1600	21,600	0.926	1482
21,600	8%	2	1728	23,328	0.857	1481
23,328	8%	3	1866.24	25,194	0.794	1482
25194	8%	4	2015.52	27,210	0.735	1481
27210	8%	5	2176.8	29,387	0.681	1482
29,387	8%	6	2350.96	31,738	0.63	1481
31738	8%	7	2539.04	34,277	0.583	1480
34277	8%	8	2742.16	37,019	0.54	1481
37019	8%	9	2961.52	39,981	0.5	1481
39981	8%	10	3198.48	43,179	0.463	1481

Principal	IR	Years	Cash inflows	Future value	Present Value factor	Present value of cash inflows
30,000	12%	1	3600	33,600	0.893	3215
33,600	12%	2	4032	37,632	0.797	3214
37,632	12%	3	4515.84	42,148	0.712	3215
42148	12%	4	5057.76	47,206	0.636	3217
47206	12%	5	5664.72	52,871	0.567	3212
52,871	12%	6	6344.52	59,216	0.507	3217
59216	12%	7	7105.92	66,322	0.452	3212
66322	12%	8	7958.64	74,281	0.404	3215
74281	12%	9	8913.72	83,195	0.361	3218
83195	12%	10	9983.4	93,178	0.322	3215
93178	12%	11	11181.36	1,04,359	0.287	3209
1,04,359	12%	12	12523.08	1,16,882	0.257	3218
116882	12%	13	14025.84	1,30,908	0.229	3212
130908	12%	14	15708.96	1,46,617	0.205	3220
164211	12%	15	19705.32	1,83,916	0.183	3606
183916	12%	16	22069.92	2,05,986	0.163	3597
205986	12%	17	24718.32	2,30,704	0.146	3609
230704	12%	18	27684.48	2,58,388	0.13	3599
258388	12%	19	31006.56	2,89,395	0.116	3597
289395	12%	20	34727.4	3,24,122	0.104	3612

The present value of future value for all the years should be 30,000

For 30,000

Principal	IR	Years	Cash inflows	Future value	Present Value factor	Present value of cash inflows
30,000	12%	1	3600	33,600	0.893	3215
33,600	12%	2	4032	37,632	0.797	3214
37,632	12%	3	4515.84	42,148	0.712	3215
42148	12%	4	5057.76	47,206	0.636	3217
47206	12%	5	5664.72	52,871	0.567	3212
52,871	12%	6	6344.52	59,216	0.507	3217
59216	12%	7	7105.92	66,322	0.452	3212
66322	12%	8	7958.64	74,281	0.404	3215
74281	12%	9	8913.72	83,195	0.361	3218
83195	12%	10	9983.4	93,178	0.322	3215
93178	12%	11	11181.36	1,04,359	0.287	3209
1,04,359	12%	12	12523.08	1,16,882	0.257	3218
116882	12%	13	14025.84	1,30,908	0.229	3212
130908	12%	14	15708.96	1,46,617	0.205	3220
164211	12%	15	19705.32	1,83,916	0.183	3606
183916	12%	16	22069.92	2,05,986	0.163	3597
205986	12%	17	24718.32	2,30,704	0.146	3609
230704	12%	18	27684.48	2,58,388	0.13	3599
258388	12%	19	31006.56	2,89,395	0.116	3597
289395	12%	20	34727.4	3,24,122	0.104	3612

For 50,000

Principal	IR	Years	Cash inflows	Future value	Present Value	Present value of cash inflows
50,000	4%	1	2000	52,000	0.962	1924
52,000	4%	2	2080	54,080	0.925	1924
54,080	4%	3	2163.2	56,243	0.889	1923
56243	4%	4	2249.72	58,493	0.855	1924
58493	4%	5	2339.72	60,833	0.822	1923
60,833	4%	6	2433.32	63,266	0.79	1922
63266	4%	7	2530.64	65,797	0.76	1923
65797	4%	8	2631.88	68,429	0.731	1924
68429	4%	9	2737.16	71,166	0.703	1924
71166	4%	10	2846.64	74,013	0.676	1924
74013	4%	11	2960.52	76,974	0.65	1924

The Present value of all the future values should be 50,000.