Question

How much would you have to invest today to receive the following? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.a.$15,000 in 10 years at 14 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)b.$19,500 in 20 years at 15 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.c.$7,900 each year for 19 years at 12 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)d.$54,000 each year for 50 years at 10 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Answer 1

Answer:

A) 2,395.65

B)   1,191.46

C) 58,189.64

Explanation:

A)  (lump sum)

$\frac{Maturity}{(1 + rate)^{time} } = PV$  

Maturity  $15,000.0000

time  14.00

rate  0.14000

$\frac{15000}{(1 + 0.14)^{14} } = PV$  

PV   2,395.6498

B) (lump sum)

$\frac{Maturity}{(1 + rate)^{time} } = PV$  

Maturity  $19,500.0000

time  20.00

rate  0.15000

$\frac{19500}{(1 + 0.15)^{20} } = PV$  

PV   1,191.4554

C)    (annuity)

$C \times \frac{1-(1+r)^{-time} }{rate} = PV$

C 7,900.00

time 19

rate 0.12

$7900 \times \frac{1-(1+0.12)^{-19} }{0.12} = PV$

PV $58,189.6372