1. What is the Single Payment Compound Amount factor for an interest rate of 2% over 10 years? 2. What is the Uniform Gradient Future Worth factor for an interest rate of 10% over 10 years? 3. What is the Uniform Series Present Worth factor for an interest rate of 5.5% over 20 years? 4. A bank pays 3% interest per year (compounded annually).a. To what amount will a $5,000 deposit grow if left in the bank for 10 years?b. Draw the Cash Flow Diagram for this problem.

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Asked Sep 10, 2019
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1. What is the Single Payment Compound Amount factor for an interest rate of 2% over 10 years?

 

2. What is the Uniform Gradient Future Worth factor for an interest rate of 10% over 10 years?

 

3. What is the Uniform Series Present Worth factor for an interest rate of 5.5% over 20 years?

 

4. A bank pays 3% interest per year (compounded annually).

a. To what amount will a $5,000 deposit grow if left in the bank for 10 years?

b. Draw the Cash Flow Diagram for this problem.

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Expert Answer

Step 1

 1.

Single Payment compound amount:...

Single Payment compound Amount factor = (1+ Interest rate) m p
= 1+0.02)0
1.2189
Thus, the value of single payment compound amount factor is 1.219
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Single Payment compound Amount factor = (1+ Interest rate) m p = 1+0.02)0 1.2189 Thus, the value of single payment compound amount factor is 1.219

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