Chapter 5, Problem 10P

a.

Summary Introduction

To determine: The present value and the future value.

Present Value:

The present value refers to that value which is the current value computed for future amounts based on the discounted rate.

Future Value:

The future value means that value of the investment which will be realized in the future. With the help of the calculation of future value, an analysis of the amount to be invested can be made.

b.

Summary Introduction

To determine: The present value and the future value.

Present Value:

The present value refers to that value which is the current value computed for future amounts based on the discounted rate.

Future Value:

The future value means that value of the investment which will be realized in the future. With the help of the calculation of future value, an analysis of the amount to be invested can be made.

c.

Summary Introduction

To determine: The present value and the future value.

Present Value:

The present value refers to that value which is the current value computed for future amounts based on the discounted rate.

Future Value:

The future value means that value of the investment which will be realized in the future. With the help of the calculation of future value, an analysis of the amount to be invested can be made.

d.

Summary Introduction

To determine: The present value and the future value.

Present Value:

The present value refers to that value which is the current value computed for future amounts based on the discounted rate.

Future Value:

The future value means that value of the investment which will be realized in the future. With the help of the calculation of future value, an analysis of the amount to be invested can be made.

e.

Summary Introduction

To define: The present value with a time line and the effect of interest rates on present value.