Question

Use both the TVM equations and a financial calculator to find the following values. Round your answers to the nearest cent. (Hint: Using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in parts b and d, and in many other situations, to see how changes in input variables affect the output variable.)

An initial $200 compounded for 10 years at 3.3 percent. $ _________

An initial $200 compounded for 10 years at 6.6 percent. $__________

The present value of $200 due in 10 years at a 3.3 percent discount rate. $________

The present value of $200 due in 10 years at a 6.6 percent discount rate. $_________

Answer 1

An initial $200 compounded for 10 years at 3.3 percent. $ ____276.72_____

Future value	FV=	PV * (1+r)^N
Where as:
Present value	PV=	200
Rate of interest	r=	3.30%
Number of years	N=	10.00
Future value	FV=	200 *(1+0.033)^10
	FV=	276.72

An initial $200 compounded for 10 years at 6.6 percent. $____378.97______

Future value	FV=	PV * (1+r)^N
Where as:
Present value	PV=	200
Rate of interest	r=	6.60%
Number of years	N=	10.00
Future value	FV=	200 *(1+0.066)^10
	FV=	378.97

The present value of $200 due in 10 years at a 3.3 percent discount rate. $____144.55____

Present value of money:	=	FV/ (1+r) ^N
Future value	FV=	$                     200
Rate of interest	r=	3.3%
Number of years	N=	10
Present value	=	200/ (1+0.033)^10
	=	$               144.55

The present value of $200 due in 10 years at a 6.6 percent discount rate. $___105.55______

Present value of money:	=	FV/ (1+r) ^N
Future value	FV=	$                     200
Rate of interest	r=	6.6%
Number of years	N=	10
Present value	=	200/ (1+0.066)^10
	=	$               105.55

Please rate.