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# 2. Calculate the present value of \$5,000 received five years

### Resolved Question:

2. Calculate the present value of \$5,000 received five years from today if your investments pay
a. 6 percent compounded annually
b. 8 percent compounded annually
c. 10 percent compounded annually
d. 10 percent compounded semiannually
e. 10 percent compounded quarterly
What do your answers to these questions tell you about the relation between present values and interest rates and between present values and the number of compounding periods per year?
3. Calculate the future value in five years of \$5,000 received today if your investments pay a. 6 percent compounded annually
b. 8 percent compounded annually
c. 10 percent compounded annually
d. 10 percent compounded semiannually
e. 10 percent compounded quarterly
What do your answers to these questions tell you about the relation between future values and interest rates and between future values and the number of compounding periods per year?
4. Calculate the present value of the following annuity streams:
a. \$5,000 received each year for 5 years on the last day of each year if your investments pay 6 percent compounded annually.
b. \$5,000 received each quarter for 5 years on the last day of each quarter if your investments pay 6 percent compounded quarterly.
c. \$5,000 received each year for 5 years on the first day of each year if your investments pay 6 percent compounded annually.
d. \$5,000 received each quarter for 5 years on the first day of each quarter if your investments pay 6 percent compounded quarterly.
5. Calculate the future value of the following annuity streams:
a. \$5,000 received each year for 5 years on the last day of each year if your investments pay 6 percent compounded annually.
b. \$5,000 received each quarter for 5 years on the last day of each quarter if your investments pay 6 percent compounded quarterly.
c. \$5,000 received each year for 5 years on the first day of each year if your investments pay 6 percent compounded annually.
d. \$5,000 received each quarter for 5 years on the first day of each quarter if your investments pay 6 percent compounded quarterly.
Submitted: 5 years ago.
Category: Multiple Problems
Expert:  linda_us replied 5 years ago.
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