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2

Future value calculation

Without referring to the preprogrammed function on your

financial calculator or to tables,

use the basic formula for future value along with

the given interest rate,

i, and the number of periods, n,

to calculate the future value

interest factor in each of the cases shown in the following table. Compare the calculated

value to the value in Appendix Table A–1.

Case Interest rate,

i Number of periods,

n

                     A              12% 2

                     B                6 3

                     C                9 2

                     D                3 4

P4–3

Use the future value interest factors in Appendix Table A–1

in each of the cases shown in the following table to estimate, to the nearest year,

how long it would take an initial deposit, assuming no withdrawals,

a.

To double.

b.

To quadruple.

P4–

            A         7%

            B          40

            C           20

            D           10