EX: YOU DEPOSIT $500 IN A SAVINGS ACCOUNT EARING 5% ANNUAL INTEREST. SHOW
THE AMOUNT OF INTERESTED EARNED FOR THE FIRST YEARS AND THE VBALUE OF
YOUR SAVINGS AT THE END OF THE 5 YEARS.
-PV B/C IT WAS DEP. ALSO NO MONEY IN PMT B/C NO ANNUAL PAY
SUPPOSE JAMIE’S FATHER PROMISES TO GIVE HER $20,000.00 WHEN SHE REACHES AGE 16 (3
YEARS FROM NOW) AND THE RISK-FREE INTEREST RATE IS 5% PER YEAR. HOW MUCH IS THE
WORTH TO HER TODAY?
+ FV NO MONEY IN PMT NO ANNUAL PAY SO NOTHING IN PMT
How much money will you accumulate by the end of year 10 if you deposit $3,000.00 at the
end of each of the next 10 years, in a savings account that earn 5% per year
-PMT B/C THEY PAID THE SAME AMOUNT YEARLY
WHAT IS THE LUMP SUM EQUIVALENT TODAY OF RECEIVING $500 PER YEAR FOR THE NEXT 5
YEARS (AT THE BEGINNING) OF EACH YEAR? AT AN INTEREST RATE OF 6% PER AMOUNT.
+PMT B/C SHE RECEIVED THE SAME AMOUNT YEARLY TYPE IS 1 B/C IT
STATES THE BEGININNING.
THE AMOUNT OF INTERESTED EARNED FOR THE FIRST YEARS AND THE VBALUE OF
YOUR SAVINGS AT THE END OF THE 5 YEARS.
-PV B/C IT WAS DEP. ALSO NO MONEY IN PMT B/C NO ANNUAL PAY
SUPPOSE JAMIE’S FATHER PROMISES TO GIVE HER $20,000.00 WHEN SHE REACHES AGE 16 (3
YEARS FROM NOW) AND THE RISK-FREE INTEREST RATE IS 5% PER YEAR. HOW MUCH IS THE
WORTH TO HER TODAY?
+ FV NO MONEY IN PMT NO ANNUAL PAY SO NOTHING IN PMT
How much money will you accumulate by the end of year 10 if you deposit $3,000.00 at the
end of each of the next 10 years, in a savings account that earn 5% per year
-PMT B/C THEY PAID THE SAME AMOUNT YEARLY
WHAT IS THE LUMP SUM EQUIVALENT TODAY OF RECEIVING $500 PER YEAR FOR THE NEXT 5
YEARS (AT THE BEGINNING) OF EACH YEAR? AT AN INTEREST RATE OF 6% PER AMOUNT.
+PMT B/C SHE RECEIVED THE SAME AMOUNT YEARLY TYPE IS 1 B/C IT
STATES THE BEGININNING.
