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1. Complete the table

Present value Rate Time Compounding Frequency Table Factor Future Value

\$5,000 12% 2yrs Annual ? ?

\$5,000 12% 2yrs Semiannual ? ?

\$5,000 12% 2yrs Quarterly ? ?

\$5,000 12% 2yrs Monthly ? ?

2. Cindy has decided to retire in 24 yrs. She has \$30,000 available today and wants to invest the money to supplement her pension plan.

a. assume Cindy wants to accumulate \$150,000 by her retirement date. Will she achieve her goal if she invests \$30,000 today and earns 6%? Please show calculations to support your yes/no answer.

b. If cindy invests a total of \$30,000 through a series of 24 equal annual installments at the end of the year instead of a single amount, would Cindy accumulate the desired \$100,000 at the 6% annual interest? The first investment would be one year from today. Please show calculations to support answer.

3. Smith plans to choose one of 3 investments. Investment A pays \$2,500 at the end of each year for 3 years. Investment B pays \$8,500 at the end of 5 years. Investment C pays \$1,000 at the end of each year for 4 years and pays \$4,000 at the end of the 5th yr. Smith requires a rate of return of 7% on each of these investments.

a. what is the present value of Investment A

b. what is the present value of Investment B

c. what is the present value of Investment C