PRESENT AND FUTURE VALUES FOR DIFFERENT INTEREST RATES Find

PRESENT AND FUTURE VALUES FOR DIFFERENT INTEREST RATES Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent. a. An initial $200 compounded for 10 years at 990. b. An initial $200 compounded for 10 years at 18%. c. The present value of $200 due in 10 year at 9% d. The present value of $2,235 due in 10 years at 18%. e. The present value of $2,235 due in 10 years at 9%.

Solution

a. future value = 200*1.09^10 = 473.47

b. future value = 200*1.18^10 = 1046.77

c. Present value = 200/1.09^10 = 84.48

d. present value = 2235/1.18^10 = 427.03

e. present value = 2235/1.09^10 = 944.09