Exercise 64 Using the appropriate interest table answer the

Exercise 6-4

Using the appropriate interest table, answer the following questions. (Each case is independent of the others).

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SUBMIT ANSWER

Exercise 6-4 Using the appropriate interest table, answer the following questions. (Each case is independent of the others).

Solution

What is the future value of 22 periodic payments of $4,790 each made at the beginning of each period and compounded at 8%?

Answer:

Future value = 4790/8%*[(1.08)^22 - 1] = 59875*4.436 = 265606

What is the present value of $4,320 to be received at the beginning of each of 28 periods, discounted at 5% compound interest?

Answer:

Present value = 4320 + 4320*Present value annuity factor(5%,27) = 4320 + 4320*14.643 = 67578

What is the future value of 16 deposits of $3,970 each made at the beginning of each period and compounded at 10%? (Future value as of the end of the 16th period.)

Answer:

Future value = 3970/10%*[(1.10)^16 - 1]*(1.10) = 39700*3.59497*1.1 = 156992

What is the present value of 6 receipts of $3,010 each received at the beginning of each period, discounted at 9% compounded interest?

Answer:

Present value = 3010 + 3010*Present value annuity factor(9%,5) = 3010 + 3010*3.88965 = 14718