Multiple Choice Questions
21.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
Interest may be defined as:
A. Time.
B. A borrower's payment to the owner of an asset for its use.
C. The future value of a present amount.
D. Always a liability.
E. Always an asset.
22.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
If we want to know the value of present-day assets at a future date, we can use:
A. Present value computations.
B. Annuity computations.
C. Interest computations.
D. Future value computations.
E. Earnings computations.
23.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
Which interest rate column would you use from a present value or future value table for 8% interest compounded quarterly?
A. 12%
B. 6%
C. 3%
D. 2%
E. 1%
An 8% annual interest rate is divided by 4 to find the quarterly rate.
24.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
A company is considering investing in a project that is expected to return $350,000 four years from now. How much is the company willing to pay for this investment if the company requires a 12% return?
A. $55,606
B. $137,681
C. $222,425
D. $265,764
E. $350,000
The PV factor on the Present Value table when n = 4 and i = 12% is 0.6355
Present Value = Future Value * PV Factor
Present Value = $350,000 * 0.6355 = $222,425
25.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
Jason has a loan that requires a single payment of $4,000 at the end of 3 years. The loan's interest rate is 6%, compounded semiannually. How much did Jason borrow?
A. $3,358.40
B. $4,000.00
C. $3,660.40
D. $4,776.40
E. $3,350.00
3 years = 6 semiannual periods; 6% annual interest = 3% semiannually
The PV factor on the Present Value table when n = 6 and i = 3% is 0.8375
Present Value = Future Value * PV Factor
Present Value = $4,000 * 0.8375 = $3,350.00
26.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
Patricia wants to invest a sum of money today that will yield $10,000 at the end of 6 years. Assuming she can earn an interest rate of 6% compounded annually, how much must she invest today?
A. $7,050
B. $9,400
C. $6,000
D. $8,836
E. $8,306
The PV factor on the Present Value table when n = 6 and i = 6% is 0.7050
Present Value = Future Value * PV Factor
Present Value = $10,000 * 0.7050 = $7,050.00
27.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,000 at the end of each of the next 10 years. Assuming he can earn an interest rate of 5% compounded annually, how much of his inheritance must he invest today?
A. $50,000.00
B. $47,500.00
C. $45,125.00
D. $38,608.50
E. $100,000.00
The PV factor on the Present Value of an Annuity table when n = 10 and i = 5% is 7.7217
Present Value = Future Annuity Value * PV Factor
Present Value = $5,000 * 7.7217 = $38,608.50
28.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
Cody invests $1,800 per year from his summer wages at a 4% annual interest rate. He plans to take a European vacation at the end of 4 years when he graduates from college. How much will he have available to spend on his vacation?
A. $7,787.52
B. $7,488.00
C. $6,912.00
D. $7,200.00
E. $7,643.70
The FV factor on the Future Value of an Annuity table when n = 4 and i = 4% is 4.2465
Future Value = Annuity Value * FV Factor
Future Value = $1,800 * 4.2465 = $7,643.70
29.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
Jessica received a gift of $7,500 at the time of her high school graduation. She invests it in an account that yields 10% compounded semi-annually. What will the value of Jessica's investment be at the end of 5 years?
A. $8,250.00
B. $11,250.00
C. $12,216.75
D. $9,375.00
E. $10,500.00
Five years = 10 semiannual periods and a 10% annual interest rate = 5% semiannually
The FV factor on the Future Value of 1 table when n = 10 and i = 5% is 1.6289
Future Value = Present Value * FV Factor
Future Value = $7,500 * 1.6289 = $12,216.75
30.Present Value of 1
Periods3%4%5%6%7%8%9%10%12%
30.91510.88900.86380.83960.81630.79380.77220.75130.7118
40.88850.85480.82270.79210.76290.73500.70840.68300.6355
50.86260.82190.78350.74730.71300.68060.64990.62090.5674
60.83750.79030.74620.70500.66630.63020.59630.56450.5066
70.81310.75990.71070.66510.62270.58350.54700.51320.4523
80.78940.73070.67680.62740.58200.54030.50190.46650.4039
90.76640.70260.64460.59190.54390.50020.46040.42410.3606
100.74410.67560.61390.55840.50830.46320.42240.38550.3220
Future Value of 1
Periods3%4%5%6%7%8%9%10%12%
31.09271.12491.15761.19101.22501.25971.29501.33101.4049
41.12551.16991.21551.26251.31081.36051.41161.46411.5735
51.15931.21671.27631.33821.40261.46931.53861.61051.7623
61.19411.26531.34011.41851.50071.58691.67711.77161.9738
71.22991.31591.40711.50361.60581.71381.82801.94872.2107
81.26681.36861.47751.59381.71821.85091.99262.14362.4760
91.30481.42331.55131.68951.83851.99902.17192.35792.7731
101.34391.48021.62891.79081.96722.15892.36742.59373.1058
Present Value of an Annuity of 1
Periods3%4%5%6%7%8%9% 10%12%
32.82862.77512.72322.67302.62432.57712.53132.48692.4018
43.71713.62993.54603.46513.38723.31213.23973.16993.0373
54.57974.45184.32954.21244.10023.99273.88973.79083.6048
65.41725.24215.07574.91734.76654.62294.48594.35534.1114
76.23036.00215.78645.58245.38935.20645.03304.86844.5638
87.01976.73276.46326.20985.97135.74665.53485.33494.9676
97.78617.43537.10786.80176.51526.24695.99525.79505.3282
108.53028.11097.72177.36017.02366.71016.41776.14465.6502
Future Value of an Annuity of 1
Periods3%4%5%6%7%8%9%10%12%
33.09093.12163.15253.18363.21493.24643.27813.31003.3744
44.18364.24654.31014.37464.43994.50614.57314.64104.7793
55.30915.41635.52565.63715.75075.86665.98476.10516.3528
66.46846.63306.80196.97537.15337.33597.52337.71568.1152
77.66257.89838.14208.39388.65408.92289.20049.487210.089
88.89239.21429.54919.897510.26010.63711.02911.43612.300
910.15910.58311.02711.49111.97812.48813.02113.58014.776
1011.46412.00612.57813.18113.81614.48715.19315.93717.549
A company expects to invest $5,000 today at 12% annual interest and plans to receive $15,529 at the end of the investment period. How many years will elapse before the company accumulates the $15,529?
A. 0.322 years
B. 3.1058 years
C. 5 years
D. 8 years
E. 10 years
Present Value = Future Value * PV Factor
$5,000 = $15,529 * PV Factor
PV Factor = 0.3220
0.3220 is the PV factor on the Present Value table; i = 12%; n = 10
Or, Alternative Solution:
Future Value = Present Value * FV Factor
$15,529 = $5,000 * FV Factor
Interest Factor = 3.1058;
3.1058 is the FV factor on the Future Value table; i = 12%; n = 10