Find the following values. Compounding/discounting occurs annually. a. An initial $500 compounded for 10 years at 6% b. An initial $500 compounded for 10 years at 12% c. The present value of $500 due...

(a) An initial $500 compounded for 10 year at6%
(a) An initial $500 compounded for 10 year at6%
Present Value (PV) = $500
Time (t) = 10 years
Interest Rate (r) = 6% or 0.06 per year
Future Value =?
We know that;
FV = PV * (1+r) t
FV = 500 * (1+0.06) 10
FV = 500 * (1.06) 10
FV = 500 * 1.790848
FV = $895.42
(b) An initial $500 compounded for 10 years at12%
Present Value (PV) = $500
Time (t) = 10 year
Interest Rate (r) = 12% or 0.12 per year
Future Value =?
We know that;
FV = PV * (1+r) t
FV = 500 * (1+0.12) 10
FV = 500 * (1.12) 10
FV = 500 * 3.105848
FV = $1552.92
(c) The present value of $500 due in 10 years at6%
Future Value =...