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PRESENT AND FUTURE VALUES FOR DIFFERENT PERIODS Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually. a. An initial $500 compounded for 1 year at 6% b. An initial $500 compounded for 2 years at 6% c. The present value of $500 due in 1 year at a discount rate of 6% d. The present value of $500 due in 2 years at a discount rate of 6%

PRESENT AND FUTURE VALUES FOR DIFFERENT PERIODS Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually. a. An initial $500 compounded for 1 year at 6% b. An initial $500 compounded for 2 years at 6% c. The present value of $500 due in 1 year at a discount rate of 6% d. The present value of $500 due in 2 years at a discount rate of 6%

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA3: Time Value Of Money
Section: Chapter Questions
Problem 11E
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5-9 PRESENT AND FUTURE VALUES FOR DIFFERENT PERIODS Find the following values using the aquations and then a financial calculator. Compounding/discounting occurs annually. a. An initial $500 compounded for 1 year at 6% b. An initial $500 compounded for 2 years at 6% c. The present value of $500 due in 1 year at a discount rate of 6% d. The present value of $500 due in 2 years at a discount rate of 6% -10 PRESENT AND FUTURE VALUES FOR DIFFERENT INTEREST RATES Find the following values. Compounding/discounting occurs annually. a. An initial $500 compounded for 10 years at 6% b. An initial $500 compounded for 10 years at 12% c. The present value of $500 due in 10 years at 6% d. The present value of $1,552.90 due in 10 years at 12% and at 6% e. Define present value and illustrate it using a time line with data from Part d. How are present values affected by interest rates?
Transcribed Image Text:5-9 PRESENT AND FUTURE VALUES FOR DIFFERENT PERIODS Find the following values using the aquations and then a financial calculator. Compounding/discounting occurs annually. a. An initial $500 compounded for 1 year at 6% b. An initial $500 compounded for 2 years at 6% c. The present value of $500 due in 1 year at a discount rate of 6% d. The present value of $500 due in 2 years at a discount rate of 6% -10 PRESENT AND FUTURE VALUES FOR DIFFERENT INTEREST RATES Find the following values. Compounding/discounting occurs annually. a. An initial $500 compounded for 10 years at 6% b. An initial $500 compounded for 10 years at 12% c. The present value of $500 due in 10 years at 6% d. The present value of $1,552.90 due in 10 years at 12% and at 6% e. Define present value and illustrate it using a time line with data from Part d. How are present values affected by interest rates?
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