Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
16. To answer this question, we can use either the FV or the PV formula. Both will give the same answer
since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)t
Solving for r, we get:
r = (FV / PV)1 / t – 1
a. The time line is:
0 20
–$50 $100
r = (FV / PV)1 / t – 1
b. The time line is:
0 10
–$50 FV
FV = PV(1 + r)t
c. The time line is:
0 10
–$50.50 $100
r = (FV / PV)1 / t – 1
17. The time line is:
0 9
PV $225,000
To find the PV of a lump sum, we use:
18. To find the FV of a lump sum, we use:
FV = PV(1 + r)t
0 45
$5,000 FV
0 35
$5,000 FV
Better start early!
19. The time line is:
0 2 8
$20,00
0
FV
We need to find the FV of a lump sum. However, the money will only be invested for six years, so
the number of periods is six.
FV = PV(1 + r)t
20. The time line is:
0 2 ?
–
$15,00
0
$75,000
To answer this question, we can use either the FV or the PV formula. Both will give the same answer
since they are the inverse of each other. We will use the FV formula, that is:
FV = PV(1 + r)t
Solving for t, we get:
So, the money must be invested for 18.68 years. However, you will not receive the money for
another two years. From now, you’ll wait:
Calculator Solutions
1.
Enter 7 8% $9,000
N I/Y PV PMT FV
Solve for $15,424.42
2.
Enter 11 13% $1,975
N I/Y PV PMT FV
Solve for $7,575.83
Enter 7 9% $6,734
N I/Y PV PMT FV
Solve for $12,310.02
3.
Enter 9 7% $15,451
N I/Y PV PMT FV
Solve for $8,404.32
Enter 7 13% $51,557
N I/Y PV PMT FV
Solve for $21,914.85
4.
Enter 4 $181 $297
N I/Y PV PMT FV
Solve for 13.18%
Enter 18 $335 $1,080
N I/Y PV PMT FV
Solve for 6.72%
5.
Enter 6% $560 $1,389
N I/Y PV PMT FV
Solve for 15.59
Enter 9% $810 $1,821
N I/Y PV PMT FV
Solve for 9.40
Solve for 24.52
6.
7.
Enter 7.3% $1 $2
N I/Y PV PMT FV
Solve for 9.84
8.
9.
10.
11.
12.
Enter 111 4.30% $50
N I/Y PV PMT FV
13.
Enter 119 $150 $1,620,000
N I/Y PV PMT FV
Enter 26 8.12% $1,620,000
N I/Y PV PMT FV
14.
Enter 4 $12,377,500 $10,311,500
N I/Y PV PMT FV
15.
Enter 192 $15 $430,000
N I/Y PV PMT FV
N I/Y PV PMT FV
N I/Y PV PMT FV
16. a.
Enter 20 $50 $100
N I/Y PV PMT FV
16. b.
Enter 10 .10% $50
N I/Y PV PMT FV
16. c.
Enter 10 $50.50 $100
N I/Y PV PMT FV
17.
Enter 9 12% $225,000
N I/Y PV PMT FV
18.
Enter 45 10% $5,000
N I/Y PV PMT FV
Enter 35 10% $5,000
N I/Y PV PMT FV
19.
Enter 6 7.30% $20,000
N I/Y PV PMT FV
20.
Enter 9% $15,000 $75,000
N I/Y PV PMT FV
