Question

Find the following values for a lump sum assuming annual compounding. a. The future value of $800 invested at 7% for one year b. The future value of $800 invested at 7% for five years c. The present value of $800 invested at 7% for one year d. The present value of $800 invested at 7% for five years

Answer 1

For the first 2 we calculate the future value:

(A)856

(B)1,122.04

(C) and (D) thre present value will be 800

Step-by-step explanation:

`Principal * (1+ r)^(time) = Ammount`

`800* (1+ 0.07)^(1) = Ammount`

856

`800* (1+ 0.07)^(5) = Ammount`

1,122.041358

`(856)/((1 + 0.07)^(1) ) = 800`

`(1,122.04)/((1 + 0.07)^(5) ) = 800`