FIN 370 Lab Study Guide - All Weeks - Additional Formula
(Compound interest) to what amount will the following investments accumulate?
a. $5,000 invested for 10 years at 10 percent compounded annually
5000 x (1.10)^10 = 5000 x2.5937 =12968.5
b. $8,000 invested for 7 years at 8 percent compounded annually
8000 x (1.08)^7 = 8000 x 1.7138 = 13710.59
c. $775 invested for 12 years at 12 percent compounded annually
775 x (1.12)^12 = 775 x3.8959 =3019.38
d. $21,000 invested for 5 years at 5 percent compounded annually
21000 x (1.05)^5 =21000x 1.2762 =26801.91
(Compound value solving for n) How many years will the following take?
a. $500 to grow to $1,039.50 if invested at 5 percent compounded annually
500/1039.5 =.481
Lookup .48
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$500 a year for 10 years discounted back to the present at 10 percent 500 x {1-(1/1.1)10}/.1 = 500 x 6.1445 =3072 (Compound value solving for I) at what annual rate would the following have to be investe a. $500 to grow to $1,948.00 in 12 years 1948/500 = (1+r)12 12 under root 3.896 =1.12 =1.12-1 = .12 or 12% Rate = 12% b. $300 to grow to $422.10 in 7 years 422.1/300 = (1+r)7 7 under root 1.407 =1.05 =1.05-1 = .05 or 5% Rate = 5% c. $50 to grow to $280.20 in 20 years 280.2/50 = (1+r)20 20 under root 5.604 =1.09 =1.09-1 = .09 or 9% Rate = 9% d. $200 to grow to $497.60 in 5 years 497.6/200 = (1+r)5 5 under root 2.488 =1.2 =1.2-1 = .2 or 20% Rate = 20% (Compound annuity) what is the accumulated sum of each of the following streams of payme a. $500 a year for 10 years compounded annually at 5 percent 500x{1.05)10-1}/.05 = 500x12.5778 =6289 b. $100 a year for 5 years compounded annually at 10 percent 100 x (1.10)5-1/.10 = 100 x 6.1051 =610.51 c. $35 a year for 7 years compounded annually at 7 percent 35 x (1.07)7-1/.07 = 35x 8.65 = 302.89 d. $25 a year for 3 years compounded annually at 2 percent 25 x (1.02)3-1/.02 = 25 x 3.06 = 76.51 ditional Formulas stments accumulate? e following take? Compound Interest Calculator Investment Amount Years 4900.00 9 Solution: $10,642.28 Compound Value Solving for n Calculator Investment Amount Future Amount

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