Question

Which variable has the biggest impact on TVM calculations? Examine an FV of an annuity problem where annual payments are $2,800, the rate of return is 8%, and the number of years is 10. Using these inputs, the FV of the annuity is $40,562.37. For the following questions, use the originally stated variables (PMT = $2,800, N = 10, and I = 8%) except as directed in the question.

What is the FV if the annual payment is doubled from $2,800 to $5,600? (Round answer to 2 decimal places, e.g. 52.75.)

When the annual payment is doubled, the FV increases to $  .

What is the FV if the interest rate is doubled from 8% to 16%? (Round answer to 2 decimal places, e.g. 52.75.)

When interest rate is doubled, FV increases to $  .

What is the FV if the time period is doubled from 10 years to 20 years? (Round answer to 2 decimal places, e.g. 52.75.)


When the time period is doubled, FV increases to $  .

Answer 1

As nothing was mentioned excel is used.