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9
Practical Analysis
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Assignment Details
Answer to the QUESTION 1
a)
Present Value = $ ???
Years = 10 = time period
Interest Rate per year = 1 2 percent
Future Value = $ 5000
Applying the Formula to compute the :
Present Value of money = Future Value of money received / ( 1 + Interest rate ) ^ time period
=$ 5000 / (1 + 12 %)^10 = $ 1609.86618295
b)
Present Value = $ 10000
Years = 10 = time period
Interest Rate per year = 10 percent
Future Value = $ ????
Applying the Formula to compute the :
Present Value of money = Future Value of money received / ( 1 + Interest rate ) ^ time period
$ 10000 = FV ( 1+ 10%) ^10 = $ 16105
c)
i)Present Value = $ ???
Years = 4 = time period
Interest Rate per year = 8 percent
Future Value = $ 5000
Applying the Formula to compute the :
Present Value of money = Future Value of money received / ( 1 + Interest rate ) ^ time period
=$ 5000 / (1 + 8 %) ^ 4 = $ 3675
ii) Present Value = $ ???
Years = 20 = time period
Interest Rate per year = 8 percent
Future Value = $ 6000
Applying the Formula to compute the :
Present Value of money = Future Value of money received / ( 1 + Interest rate ) ^ time period
=$ 6000 / (1 + 8 %)^20 = $ 1287.29
= $ 1287.29 + $ 3675 = $ 4692.44
d)
i)Present Value = $ 5000
Years = 50 = time period
Interest Rate per year = 8 percent
Future Value = $ ???
Applying the Formula to compute the :
Present Value of...