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You wish to have $21,000 in 8 years. Use Table 11-2 to create a new table factor, and then find how much you should invest now (in $) at 6% interest, compounded quarterly in order to have $21,000, 8 years from now. (Round your answer to the nearest cent.)

You wish to have $21,000 in 8 years. Use Table 11-2 to create a new table factor, and then find how much you should invest now (in $) at 6% interest, compounded quarterly in order to have $21,000, 8 years from now. (Round your answer to the nearest cent.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 2P
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TABLE 11-2 Present Value Table (Present Value of $1 at Compound Interest) 1% Periods 1% 2% 3% 4% 5% 6% 7% 8% Periods 1 0.99502 0.99010 0.98522 0.98039 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 1 2 0.99007 0.98030 0.97066 0.96117 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.98515 0.97059 0.95632 0.94232 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 3 4 0.98025 0.96098 0.94218 0.92385 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 4 0.97537 0.95147 0.92826 0.90573 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 5 6. 0.97052 0.94205 0.91454 0.88797 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 6. 7 0.96569 0.93272 0.90103 0.87056 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 7 8 0.96089 0.92348 0.88771 0.85349 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 8. 9 0.95610 0.91434 0.87459 0.83676 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 9 10 0.95135 0.90529 0.86167 0.82035 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 10 11 0.94661 0.89632 0.84893 0.80426 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 11 12 0.94191 0.88745 0.83639 0.78849 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 12 13 0.93722 0.87866 0.82403 0.77303 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 13 14 0.93256 0.86996 0.81185 0.75788 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 14 15 0.92792 0.86135 0.79985 0.74301 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 15 16 0.92330 0.85282 0.78803 0.72845 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 16 17 0.91871 0.84438 0.77639 0.71416 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 17 18 0.91414 0.83602 0.76491 0.70016 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 18 19 0.90959 0.82774 0.75361 0.68643 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 19 20 0.90506 0.81954 0.74247 0.67297 0.55368 0.45639 0.37689 0.31180 0.25842 0.21455 20 21 0.90056 0.81143 0.73150 0.65978 0.53755 0.43883 0.35894 0.29416 0.24151 0.19866 21 22 0.89608 0.80340 0.72069 0.64684 0.52189 0.42196 0.34185 0.27751 0.22571 0.18394 22 23 0.89162 0.79544 0.71004 0.63416 0.50669 0.40573 0.32557 0.26180 0.21095 0.17032 23 24 0.88719 0.78757 0.69954 0.62172 0.49193 0.39012 0.31007 0.24698 0.19715 0.15770 24 25 0.88277 0.77977 0.68921 0.60953 0.47761 0.37512 0.29530 0.23300 0.18425 0.14602 25 Periods 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% Periods 1 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 0.86957 0.86207 0.85470 0.84746 1 2 0.84168 0.82645 0.81162 0.79719 0.78315 0.76947 0.75614 0.74316 0.73051 0.71818 3 0.77218 0.75131 0.73119 0.71178 0.69305 0.67497 0.65752 0.64066 0.62437 0.60863 3 4 0.70843 0.68301 0.65873 0.63552 0.61332 0.59208 0.57175 0.55229 0.53365 0.51579 4 0.64993 0.62092 0.59345 0.56743 0.54276 0.51937 0.49718 0.47611 0.45611 0.43711 6. 0.59627 0.56447 0.53464 0.50663 0.48032 0.45559 0.43233 0.41044 0.38984 0.37043 6. 7 0.54703 0.51316 0.48166 0.45235 0.42506 0.39964 0.37594 0.35383 0.33320 0.31393 7 0.50187 0.46651 0.43393 0.40388 0.37616 0.35056 0.32690 0.30503 0.28478 0.26604 8 9 0.46043 0.42410 0.39092 0.36061 0.33288 0.30751 0.28426 0.26295 0.24340 0.22546 9 10 0.42241 0.38554 0.35218 0.32197 0.29459 0.26974 0.24718 0.22668 0.20804 0.19106 10 11 0.38753 0.35049 0.31728 0.28748 0.26070 0.23662 0.21494 0.19542 0.17781 0.16192 11 12 0.35553 0.31863 0.28584 0.25668 0.23071 0.20756 0.18691 0.16846 0.15197 0.13722 12 13 0.32618 0.28966 0.25751 0.22917 0.20416 0.18207 0.16253 0.14523 0.12989 0.11629 13 14 0.29925 0.26333 0.23199 0.20462 0.18068 0.15971 0.14133 0.12520 0.11102 0.09855 14 15 0.27454 0.23939 0.20900 0.18270 0.15989 0.14010 0.12289 0.10793 0.09489 0.08352 15 16 0.25187 0.21763 0.18829 0.16312 0.14150 0.12289 0.10686 0.09304 0.08110 0.07078 16 17 0.23107 0.19784 0.16963 0.14564 0.12522 0.10780 0.09293 0.08021 0.06932 0.05998 17 18 0.21199 0.17986 0.15282 0.13004 0.11081 0.09456 0.08081 0.06914 0.05925 0.05083 18 19 0.19449 0.16351 0.13768 0.11611 0.09806 0.08295 0.07027 0.05961 0.05064 0.04308 19 20 0.17843 0.14864 0.12403 0.10367 0.08678 0.07276 0.06110 0.05139 0.04328 0.03651 20 21 0.16370 0.13513 0.11174 0.09256 0.07680 0.06383 0.05313 0.04430 0.03699 0.03094 21 22 0.15018 0.12285 0.10067 0.08264 0.06796 0.05599 0.04620 0.03819 0.03162 0.02622 22 23 0.13778 0.11168 0.09069 0.07379 0.06014 0.04911 0.04017 0.03292 0.02702 0.02222 23 24 0.12640 0.10153 0.08170 0.06588 0.05323 0.04308 0.03493 0.02838 0.02310 0.01883 24 25 0.11597 0.09230 0.07361 0.05882 0.04710 0.03779 0.03038 0.02447 0.01974 0.01596 25 1 rounded to five decimal places, where i is the interest rate per period and The values in Table 11-2 were generated by the formula PV = n is the total number of periods. (1 + i)"
Transcribed Image Text:TABLE 11-2 Present Value Table (Present Value of $1 at Compound Interest) 1% Periods 1% 2% 3% 4% 5% 6% 7% 8% Periods 1 0.99502 0.99010 0.98522 0.98039 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 1 2 0.99007 0.98030 0.97066 0.96117 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.98515 0.97059 0.95632 0.94232 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 3 4 0.98025 0.96098 0.94218 0.92385 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 4 0.97537 0.95147 0.92826 0.90573 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 5 6. 0.97052 0.94205 0.91454 0.88797 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 6. 7 0.96569 0.93272 0.90103 0.87056 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 7 8 0.96089 0.92348 0.88771 0.85349 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 8. 9 0.95610 0.91434 0.87459 0.83676 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 9 10 0.95135 0.90529 0.86167 0.82035 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 10 11 0.94661 0.89632 0.84893 0.80426 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 11 12 0.94191 0.88745 0.83639 0.78849 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 12 13 0.93722 0.87866 0.82403 0.77303 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 13 14 0.93256 0.86996 0.81185 0.75788 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 14 15 0.92792 0.86135 0.79985 0.74301 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 15 16 0.92330 0.85282 0.78803 0.72845 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 16 17 0.91871 0.84438 0.77639 0.71416 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 17 18 0.91414 0.83602 0.76491 0.70016 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 18 19 0.90959 0.82774 0.75361 0.68643 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 19 20 0.90506 0.81954 0.74247 0.67297 0.55368 0.45639 0.37689 0.31180 0.25842 0.21455 20 21 0.90056 0.81143 0.73150 0.65978 0.53755 0.43883 0.35894 0.29416 0.24151 0.19866 21 22 0.89608 0.80340 0.72069 0.64684 0.52189 0.42196 0.34185 0.27751 0.22571 0.18394 22 23 0.89162 0.79544 0.71004 0.63416 0.50669 0.40573 0.32557 0.26180 0.21095 0.17032 23 24 0.88719 0.78757 0.69954 0.62172 0.49193 0.39012 0.31007 0.24698 0.19715 0.15770 24 25 0.88277 0.77977 0.68921 0.60953 0.47761 0.37512 0.29530 0.23300 0.18425 0.14602 25 Periods 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% Periods 1 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 0.86957 0.86207 0.85470 0.84746 1 2 0.84168 0.82645 0.81162 0.79719 0.78315 0.76947 0.75614 0.74316 0.73051 0.71818 3 0.77218 0.75131 0.73119 0.71178 0.69305 0.67497 0.65752 0.64066 0.62437 0.60863 3 4 0.70843 0.68301 0.65873 0.63552 0.61332 0.59208 0.57175 0.55229 0.53365 0.51579 4 0.64993 0.62092 0.59345 0.56743 0.54276 0.51937 0.49718 0.47611 0.45611 0.43711 6. 0.59627 0.56447 0.53464 0.50663 0.48032 0.45559 0.43233 0.41044 0.38984 0.37043 6. 7 0.54703 0.51316 0.48166 0.45235 0.42506 0.39964 0.37594 0.35383 0.33320 0.31393 7 0.50187 0.46651 0.43393 0.40388 0.37616 0.35056 0.32690 0.30503 0.28478 0.26604 8 9 0.46043 0.42410 0.39092 0.36061 0.33288 0.30751 0.28426 0.26295 0.24340 0.22546 9 10 0.42241 0.38554 0.35218 0.32197 0.29459 0.26974 0.24718 0.22668 0.20804 0.19106 10 11 0.38753 0.35049 0.31728 0.28748 0.26070 0.23662 0.21494 0.19542 0.17781 0.16192 11 12 0.35553 0.31863 0.28584 0.25668 0.23071 0.20756 0.18691 0.16846 0.15197 0.13722 12 13 0.32618 0.28966 0.25751 0.22917 0.20416 0.18207 0.16253 0.14523 0.12989 0.11629 13 14 0.29925 0.26333 0.23199 0.20462 0.18068 0.15971 0.14133 0.12520 0.11102 0.09855 14 15 0.27454 0.23939 0.20900 0.18270 0.15989 0.14010 0.12289 0.10793 0.09489 0.08352 15 16 0.25187 0.21763 0.18829 0.16312 0.14150 0.12289 0.10686 0.09304 0.08110 0.07078 16 17 0.23107 0.19784 0.16963 0.14564 0.12522 0.10780 0.09293 0.08021 0.06932 0.05998 17 18 0.21199 0.17986 0.15282 0.13004 0.11081 0.09456 0.08081 0.06914 0.05925 0.05083 18 19 0.19449 0.16351 0.13768 0.11611 0.09806 0.08295 0.07027 0.05961 0.05064 0.04308 19 20 0.17843 0.14864 0.12403 0.10367 0.08678 0.07276 0.06110 0.05139 0.04328 0.03651 20 21 0.16370 0.13513 0.11174 0.09256 0.07680 0.06383 0.05313 0.04430 0.03699 0.03094 21 22 0.15018 0.12285 0.10067 0.08264 0.06796 0.05599 0.04620 0.03819 0.03162 0.02622 22 23 0.13778 0.11168 0.09069 0.07379 0.06014 0.04911 0.04017 0.03292 0.02702 0.02222 23 24 0.12640 0.10153 0.08170 0.06588 0.05323 0.04308 0.03493 0.02838 0.02310 0.01883 24 25 0.11597 0.09230 0.07361 0.05882 0.04710 0.03779 0.03038 0.02447 0.01974 0.01596 25 1 rounded to five decimal places, where i is the interest rate per period and The values in Table 11-2 were generated by the formula PV = n is the total number of periods. (1 + i)"
You wish to have $21,000 in 8 years. Use Table 11-2 to create a new table factor, and then find how much you should invest now (in $) at 6% interest, compounded quarterly in order to have $21,000, 8 years from now. (Round your answer to the nearest cent.)
Transcribed Image Text:You wish to have $21,000 in 8 years. Use Table 11-2 to create a new table factor, and then find how much you should invest now (in $) at 6% interest, compounded quarterly in order to have $21,000, 8 years from now. (Round your answer to the nearest cent.)
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