Textbook Problem

Present Values

Required:

Note: Round answers to two decimal places. Determine the:

a. present value of a single $14,000 cash flow in 7 years if the interest (discount) rate is 8% per year.

b. number of periods for which $5,820 must be invested at an annual interest (discount) rate of 7% to produce an investment balance of $10,000.

c. size of the annual cash flow for a 25-year annuity with a present value of $49,113 and an annual interest rate of 9%. One payment is made at the end of each year.

d. annual interest rate at which an investment of $2,542 will provide for a single $4,000 cash flow in 4 years.

e. annual interest rate earned by an annuity that costs $17,119 and provides 15 payments of $2,000 each, one at the end of each of the next 15 years.