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A company recently expanded their assembly operations at a cost of $420000 management expects that the investment will grow at a rate of 12% per year compounded annually for the next 5 years find the future value of the investment then find the present value of the amount at a rate of 6% per year compound annually

User Krzyhub
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1 Answer

4 votes

Answer:

Future Value = $740183.51

Present Value = $562054.74


F=PV(1+I)^n

PV = 420000

I = 6

n = 5


F=420000(1+(12)/(100))^5
F=740183.51

The future value is $740183.51


A=P(1+(r)/(100))^n

P = 420000

r = 6

n = 5


A=420000(1+(6)/(100))^5
A=562054.74

The present value would be $562054.74

User Quantme
by
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