Reference no: EM131594741

Q1. Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.)               

(a) What is the future value of $7,000 at the end of 5 periods at 8% compounded interest?

(b) What is the present value of $7,000 due 8 periods hence, discounted at 6%?

Q2. a) LEW Company purchased a machine at a price of $100,000 by signing a note payable, which requires a single payment of $123,210 in 2 years.

Assuming annual compounding of interest, what rate of interest is being paid on the loan?

b) Mike Finley wishes to become a millionaire. His money market fund has a balance of $92,296 and has a guaranteed interest rate of 10%.

How many years must Mike leave that balance in the fund in order to get his desired $1,000,000?

c) Assume that Sally Williams desires to accumulate $1 million in 15 years using her money market fund balance of $182,696.

At what interest rate must Sally's investment compound annually?

Q3. What is the future value of 20 periodic payments of $4,000 each made at the beginning of each period and compounded at 8%?

What is the future value of 15 periodic payments of $7,000 each made at the end of each period and compounded at 10%?

Q4. What is the present value of $2,500 to be received at the beginning of each of 30 periods, discounted at 5% compound interest?

What is the present value of $7,000 to be received at the end of each of 20 periods, discounted at 5% compound interest?