Question

1- What is the future value of 15 deposits of $3,190 each made at the beginning of each period and compounded at 10%? (Future value as of the end of the 15th period.)

The future value =

2- What is the present value of 6 receipts of $2,730 each received at the beginning of each period, discounted at 9% compounded interest?

The present value =

3- What is the future value of 25 periodic payments of $5,440 each made at the beginning of each period and compounded at 8%?

The future value =

4- What is the present value of $3,350 to be received at the beginning of each of 29 periods, discounted at 5% compound interest?

The present value =

5- Coronado Inc. issues $2,047,300 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 8%. What amount will Coronado receive when it issues the bonds? Amount received by Coronado when bonds were issued =

Answer 1

1 Future Value 3190((1.1^15-1)/.10)*1.1        111,489.64

2
Present value	2730+2730*3.88965	13,348.74

3 Future Value 5440((1.08^25-1)/.08)*1.08        429,512.02

4
Present Value	3350+3350*14.89813	53,258.74

5
Amount Received	2047300*.46319+143311*6.71008	1,909,917.16

Workings:

Year	PV Factor
1	0.91743
2	0.84168
3	0.77218
4	0.70843
5	0.64993
Annuity Factor	3.88965

Year	PV Factor
1	0.92593
2	0.85734
3	0.79383
4	0.73503
5	0.68058
6	0.63017
7	0.58349
8	0.54027
9	0.50025
10	0.46319
Annuity Factor	6.71008

Year	PV Factor
1	0.95238
2	0.90703
3	0.86384
4	0.8227
5	0.78353
6	0.74622
7	0.71068
8	0.67684
9	0.64461
10	0.61391
11	0.58468
12	0.55684
13	0.53032
14	0.50507
15	0.48102
16	0.45811
17	0.4363
18	0.41552
19	0.39573
20	0.37689
21	0.35894
22	0.34185
23	0.32557
24	0.31007
25	0.2953
26	0.28124
27	0.26785
28	0.25509
Annuity Factor	14.89813

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