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Week 6 Homework Assignment

Week 6 Homework Assignment

Q Complete the following problems on pages 112-113: 4-4, 4-5, 4-9, 4-11, 4-16 4-4. One Year Future Value. What is the future value of $400 deposited for 1 year earning an interest rate of 9 percent per year? 4-5. Multiyear Future Value. How much would be in your savings account in 11 years after depositing $150 today if the bank pays 8 percent per year? 4-9. Discounting One Year. What is the present value of $350 payment in 1 year when the discount rate is 10 percent? 4-11. Present Value. What is the present value of a $1500 payment made in 9 years when the discount rate is 8 percent? 4-16. Rule of 72. Approximately how many years are needed to double a $500 investment when interest rates are 10 percent per year? PreviousNext

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4-4 Present Value ( PV) = $400 Interest Rate (r ) = 9 % Number of periods (n) = 1 year Future Value (FV) = PV( 1 +r )^n FV = $400 (1+0.09)^1 =$436