Time Value of Money: Compounding and Discounting
Not what you're looking for?
1) How much will you have in 5 years if you put $10,000 into an account that earns 6% annually?
2) What is the present value of $100,000 you will receive in 10 years if you are using an 8% discount rate?
3) How much will you have in 10 years if you invest $1,000 a year starting today at an interest rate of 7%?
4) What is the present value of $2,000 received at the end of each year for the next 15 years at a discount rate of 7%?
5) How are the processes of discounting and compounding related? Explain.
Purchase this Solution
Solution Summary
The present values and future values are calculated, given discount rates and interest rates.
Solution Preview
Please see attached EXCEL file for the complete set of answers.
1) How much will you have in 5 years if you put $10,000 into an account that earns 6% annually?
2) What is the present value of $100,000 you will receive in 10 years if you are using an 8% discount rate?
3) How much will you have in 10 years if you invest $1,000 a year starting today at an interest rate of 7%?
4) What is the present value of $2,000 received at the end of each year for the next 15 years at a discount rate of 7%?
5) How are the processes of discounting and compounding related? Explain.
Note: the abbreviations have the following meanings
PVIF= Present Value Interest Factor
FVIF= Future Value Interest Factor
Ordinary Annuity
PVIFA= Present Value Interest Factor for an Annuity
FVIFA= Future Value Interest Factor for an Annuity
Annuity due
PVIFA (Annuity due)= Present Value Interest ...
Purchase this Solution
Free BrainMass Quizzes
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce