Present and future values for different periods

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Reference no: EM131848194

1. Present and Future Values for Different Periods

Find the following values using the equations and then a finance calculator. Compounding/discounting occurs annually.

a. An initial $200 compounded for 1 year at 6%.

b. An initial $600 compounded for 2 years at 6%.

c. The present value of $600 due in 1 year at a discount rate of 6%.

d. The present value of $600 due in 2 years at a discount rate of 6%.

2. Present and Future Values for Different Interest Rates

Find the following values. Compounding/discounting occurs annually.

a. An initial $200 compounded for 10 years at 4%.

b. An initial $200 compounded for 10 years at 8%.

c. The present value of $200 due in 10 years at 4%.

d. The present value of $1,870 due in 10 years at 8% and at 4%.

e. Define present value and illustrate it using a time line with data from part d. How are present values affected by interest rates?

Reference no: EM131848194

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