Question

How much would you have to invest today to receive the following? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.a.$15,000 in 10 years at 14 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)b.$19,500 in 20 years at 15 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.c.$7,900 each year for 19 years at 12 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)d.$54,000 each year for 50 years at 10 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Answer 1

A) 2,395.65

B) 1,191.46

C) 58,189.64

Step-by-step explanation:

A) (lump sum)

`(Maturity)/((1 + rate)^(time) ) = PV`

Maturity $15,000.0000

time 14.00

rate 0.14000

`(15000)/((1 + 0.14)^(14) ) = PV`

PV 2,395.6498

B) (lump sum)

`(Maturity)/((1 + rate)^(time) ) = PV`

Maturity $19,500.0000

time 20.00

rate 0.15000

`(19500)/((1 + 0.15)^(20) ) = PV`

PV 1,191.4554

C) (annuity)

`C * (1-(1+r)^(-time) )/(rate) = PV\\`

C 7,900.00

time 19

rate 0.12

`7900 * (1-(1+0.12)^(-19) )/(0.12) = PV\\`

PV $58,189.6372