- (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

- (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

- 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.
- (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

- (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 ...

Start Free Trial

No credit card required