DUE TODAY 6/19/2016
VVAREL
due_today_june_19_20016.docxa. Use the future value formula,
FV equals PV times left parenthesis 1 plus r right parenthesis Superscript nFV=PV×(1+r)n.
b. Use the TVM keys from a calculator.
c. Use the TVM function in a spreadsheet.
|
Present Value |
Interest Rate |
Number of Periods |
Future Value |
|
||||||||
|
$ 217.00217.00 |
3.53.5% |
33 |
? |
|
||||||||
|
$15 comma 385.0015,385.00 |
6.56.5% |
3838 |
? |
|
||||||||
|
$35 comma 800.0035,800.00 |
1212% |
2424 |
? |
|
||||||||
|
$26 comma 047.0026,047.00 |
1818% |
1212 |
? |
|
||||||||
|
Present Value |
Interest Rate |
Number of Periods |
Future Value |
|
||||||||
|
$ 217.00217.00 |
3.53.5% |
33 |
$nothing (Round to the nearest cent.) |
|
2- Future
value.
Grand Opening Bank is offering a one-time investment opportunity for its new customers. A customer opening a new checking account can buy a special savings bond for
$300300
today, which the bank will compound at
99%
for the next ten years. The savings bond must be held for at least five years, but can then be cashed in at the end of any year starting with year five. What is the value of the bond at each cash-in date up through year ten? (Use an Excel spreadsheet to solve this problem.)
What is the value of the savings bond at the end of year five?
$nothing
(Round to the nearest cent.)
3- Present
values.
Fill in the present values for the following table using one of the three methods below:
a. Use the present value formula,
PV equals FV times StartFraction 1 Over left parenthesis 1 plus r right parenthesis Superscript n EndFractionPV=FV×1(1+r)n.
b. Use the TVM keys from a calculator.
c. Use the TVM function in a spreadsheet.
|
Future Value |
Interest Rate |
Number of Periods |
Present Value |
|
||||||||
|
$ 846.00846.00 |
4.54.5% |
66 |
? |
|
||||||||
|
$ 86 comma 861.0086,861.00 |
88% |
3636 |
? |
|
||||||||
|
$330 comma 607.00330,607.00 |
1111% |
2020 |
? |
|
||||||||
|
$ 25 comma 384.1525,384.15 |
1616% |
1313 |
? |
|
||||||||
|
Future Value |
Interest Rate |
Number of Periods |
Present Value |
|
||||||||
|
$ 846.00846.00 |
4.54.5% |
66 |
$nothing (Round to the nearest cent.) |
|
4- Present
value.
You are currently in the job market. Your dream is to earn a six-figure salary
($140 comma 000140,000).
You hope to accomplish this goal within the next
2929
years. In your field, salaries grow at
3.753.75%
per year. What starting salary do you need to reach this goal?
What starting salary do you need to reach this goal?
$nothing
(Round to the nearest cent.)
5-Future value. You are a new employee with the Metro Daily
Planet.
The Planet offers three different retirement plans. Plan 1 starts the first day of work and puts
$1 comma 4001,400
away in your retirement account at the end of every year for
4040
years. Plan 2 starts after 10 years and puts away
$1 comma 9001,900
every year for
3030
years. Plan 3 starts after 20 years and puts away
$ 4 comma 400$4,400
every year for the last
2020
years of employment. All three plans guarantee an annual growth rate of
1212%.
a. Which plan should you choose if you plan to work at the Planet for
4040
years?
b. Which plan should you choose if you plan to work at the Planet for only the next
3030
years?
c. Which plan should you choose if you plan to work at the Planet for only the next
2020
years?
d. Which plan should you choose if you plan to work at the Planet for only the next
1010
years?
e. What do the answers in parts (a) through (d) imply about savings?
a. Which plan should you choose if you plan to work at the Planet for
4040
years? (Select the best response.)
A.
Plan 1Plan 1
because it offers the highest future value.
B.
Plan 2Plan 2
because it offers the highest future value.
C.
Plan 3Plan 3
because it offers the highest future value.
D.
Any one of the three plans because they offer the same future value.
1
-
Future values. Fill in the future values for the following table using one of the three methods
below:
a.
Use the future value
formula,
FV equals PV times left parenthesis 1 plus r right parenthesis Superscript n
FV
=
PV
×
(
1
+
r
)
n
.
b.
Use the TVM keys
from a calculator.
c.
Use the TVM function in a spreadsheet.
Present Value
Interest Rate
Number of Periods
Future Value
$
217.00
217.00
3.5
3.5
%
3
3
?
$
15 comma 385.00
15
,
385.00
6.5
6.5
%
38
38
?
$
35 comma 800.00
35
,
800.00
12
12
%
24
24
?
$
26 comma 047.00
26
,
047.00
18
18
%
12
12
?
Present Value
Interest Rate
Number of Periods
Future Value
$
217.00
217.00
3.5
3.5
%
3
3
$
nothing
(Round
to the nearest
cent.)
2
-
Future
value.
Grand Opening Bank is offering a
one
-
time
investment opportunity for its new customers. A
customer opening a new checking account can buy a special savings bond for
$
300
300
today,
which the bank will compound at
9
9
%
for
the next ten years. The savings bond must be held for at least five
years,
but can then be
cashed in at the end of any year starting with year five. What is the value of the bond at each
cash
-
in
date up through year
ten?
(Use
an Excel spreadsheet to
solve this
problem.)
What is the value of the savings bond at the end of year
five?
$
nothing
(Round
to the nearest
cent.)
3
-
Present
values.
Fill in the present values for the following table using one of the three methods
below:
a.
Use the
present value
formula,
PV equals FV times StartFraction 1 Over left parenthesis 1 plus r right parenthesis Superscript n
EndFraction
PV
=
FV
×
1
(
1
+
r
)
n
.
b.
Use the TVM keys from a calculator.
c.
Use the TVM function in a spreadsheet.
Future Value
Interest
Rate
Number of
Periods
Present Value
$
846.00
846.00
4.5
4.5
%
6
6
?
$
86 comma
861.00
86
,
861.00
8
8
%
36
36
?
$
330 comma 607.00
330
,
607.00
11
11
%
20
20
?
$
25 comma
384.15
25
,
384.15
16
16
%
13
13
?
1- Future values. Fill in the future values for the following table using one of the three methods
below:
a. Use the future value formula,
FV equals PV times left parenthesis 1 plus r right parenthesis Superscript nFV=PV×(1+r)n.
b. Use the TVM keys from a calculator.
c. Use the TVM function in a spreadsheet.
Present Value Interest Rate Number of Periods Future Value
$ 217.00217.00 3.53.5% 33 ?
$15 comma 385.0015,385.00 6.56.5% 3838 ?
$35 comma 800.0035,800.00 1212% 2424 ?
$26 comma 047.0026,047.00 1818% 1212 ?
Present Value Interest Rate Number of Periods Future Value
$ 217.00217.00 3.53.5% 33
$
nothing
(Round to the nearest cent.)
2- Future
value.
Grand Opening Bank is offering a one-time investment opportunity for its new customers. A
customer opening a new checking account can buy a special savings bond for
$300300
today, which the bank will compound at
99%
for the next ten years. The savings bond must be held for at least five years, but can then be
cashed in at the end of any year starting with year five. What is the value of the bond at each
cash-in date up through year ten? (Use an Excel spreadsheet to solve this problem.)
What is the value of the savings bond at the end of year five?
$
nothing
(Round to the nearest cent.)
3- Present
values.
Fill in the present values for the following table using one of the three methods below:
a. Use the present value formula,
PV equals FV times StartFraction 1 Over left parenthesis 1 plus r right parenthesis Superscript n
EndFractionPV=FV×1(1+r)n.
b. Use the TVM keys from a calculator.
c. Use the TVM function in a spreadsheet.
Future Value
Interest
Rate
Number of
Periods
Present Value
$ 846.00846.00 4.54.5% 66 ?
$ 86 comma
861.0086,861.00
88% 3636 ?
$330 comma 607.00330,607.00 1111% 2020 ?
$ 25 comma
384.1525,384.15
1616% 1313 ?
