## With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

No credit card required

## SOLUTION TO EXERCISE D-1

1. (1) This is a future value of a single amount problem.

(2) n = 10; i = 8%.

(3) The interest factor from Table 1 is 2.15892.

(4) Future Value = Principal × FV Factor Future Value = \$1,000 × 2.15892 Future Value = \$2,158.92

2. (1) This is a future value of a single amount problem.

(2) n = 10 × 2 = 20; i = 8% ÷ 2 = 4%

(3) The interest factor from Table 1 is 2.19112.

(4) Future Value = Principal × FV Factor Future Value = \$1,000 × 2.19112 Future Value = \$2,191.12

3. We would expect the answer to question 2 to be a little larger than the answer to question 1 because the interest is compounded more frequently in question 2 which means there will be a larger amount of accumulated interest by the end of year 10 in this scenario.
4. (1) This is a present value of a single amount problem.

(2) n = 10; i = 8%

(3) The interest factor from Table 3 is .46319.

(4) Present Value = Future Amount × PV Factor Present Value = \$1,000 × .46319 Present Value = \$463.19

5. (1) This is a present value of a single amount problem.

(2) n = 2 × 10 = 20; i = 8% ÷ 2 = 4%.

(3) The interest factor from ...

## With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

No credit card required