Question

Enter your answers as positive values. Download spreadsheet Time value of money-bdf7d0.xlsx a. Find the FV of $1,000 invested to earn 10% after 5 years. Round your answer to the nearest cent. $ b. What is the investment's FV at rates of 0%,4%, and 20% after 0,1,2,3,4, and 5 years? Round your answers to the nearest cent. Choose the correct graph of future value as a function of time and rate. Note: blue line is for 0%, orange line is for 4%, and grey line is for 20%. The correct graph is A. B. c. Find the PV of $1,000 due in 5 years if the discount rate is 10%. Round your answer to the nearest cent. $ d. A security has a cost of $1,000 and will return $3,000 after 5 years. What rate of return does the security provide? Round your answer to two decimal places. % nearest whole number. years PV of ordinary annuity: $ FV of ordinary annuity: $ g. How will the PV and FV of the annuity in part f change if it is an annuity due rather than an ordinary annuity? Round your answers to the nearest cent. PV of annuity due: $ FV of annuity due: $ FV with semiannual compounding: $ PV with semiannual compounding: $ Annual payment for ordinary annuity: $ Annual payment for annuity due: j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 8%. Round your answers to the nearest cent. PV of investment: $ FV of investment: $ decimal places. E - with payments beginning today. How large must the payments be to each bank? Round your answers to the nearest cent. 4. Even if the five banks provided the same effective annual rate, would a rational investor be indifferent between the banks? It is more likely that an investor would prefer the bank that compounded frequently. principal repayments, and beginning and ending loan balances. Round your answers to the nearest cent. If your answer is zero, enter "0". Choose the correct graph that shows how the payments are divided between interest and principal repayment over time. The correct graph is 0.

Answer 1

Final Answers:

a. $1,610.51

c. $620.92

d. 12.15%

j. PV of investment: $3,106.21; FV of investment: $5,599.99

Step-by-step explanation:

The Future Value (FV) of an investment of $1,000 earning 10% after 5 years is $1,610.51. This calculation is based on the compound interest formula. When $1,000 is invested at an annual interest rate of 10% compounded over 5 years, the total amount grows to $1,610.51.

The Present Value (PV) of receiving $1,000 in 5 years, discounted at a rate of 10%, amounts to $620.92. This is derived using the formula for present value, where future cash flows are discounted back to their present value based on a given discount rate.

The rate of return on a security that costs $1,000 and returns $3,000 after 5 years is 12.15%. This rate is determined by using the formula for the rate of return, considering the initial investment and the final return.

The PV and FV of an investment making end-of-year payments at 8% interest rate are PV: $3,106.21 and FV: $5,599.99, respectively. These values are computed by discounting future cash flows at 8% to find their present value and accumulating these cash flows for the future value.

The direct answers encompass the Future Value, Present Value, rate of return, and values for investment payments considering different timeframes and interest rates.

"".

Answer 2

The FV of $1,000 invested at 10% after 5 years is approximately $1,610.51.

Step-by-step explanation:

In order to find the future value (FV) of $1,000 invested to earn 10% after 5 years, you can use the formula:

FV = PV * (1 + r)^n

where PV is the present value ($1,000), r is the interest rate (0.10), and n is the number of years (5). Plugging in the values, we have:

FV = $1,000 * (1 + 0.10)^5 = $1,610.51

Therefore, the FV of $1,000 invested at 10% after 5 years is approximately $1,610.51.