Please use the directions in the first picture to answer the following questions
ID: 2731208 • Letter: P
Question
Please use the directions in the first picture to answer the following questions shown in the second pictureDirections: Use time value of money (TVM) techniques to solve the following problems. In order to help with your understanding of these problems, you must show your calculator problem set up (PV, FV, I/Y, N, PMT) and identify for which variable you are solving to receive credit consideration. For example: Starting with $10,000 how much will you have in 10 years if you earn 15 percent on your money? If you earn 8 percent how much will you have? To establish a good habit, always think about entering the period rate (i/m) and number of compounding periods (n*m) for Land N, This way when you have compounding that is not ANNUALLY, you have accounted for the difference. Remember m-the number of compounding intervals per year; so annual compounding m=1. PV=-10,000 N=n*m=10*1-10 I=i/m=15/1= PMT 0 FV=CPT=$40,455.58
Explanation / Answer
Answer 1.
Value = 10,000 * 1.08^10
Value = $21,589.25
Answer 2.
Value = 12,000 * (1 + 0.09/4)^(7*4)
Value = 12,000 * (1 + 0.0225)^28
Value = $22,374.54
Answer 3.
(a). Total Investment = 750/(1 + 0.17/12) + 750/(1 + 0.17/12)^2 + 750/(1 + 0.17/12)^3 + ... + 750/(1 + 0.17/12)^96
Investment = 750/1.0142 + 750/1.0142^2 + 750/1.0142^3 + ... + 750/1.0142^96
Investment = $39,174.00
Total Sum received over 8 years = 750*1.0142^95 + 750*1.0142^94 + 750*1.0142^93 + ... + 750
Total Sum received over 8 years = $151,657.58
Answer 4.
Cost after 5 years = 125,000 * 1.05^10
Cost after 5 years = $203,611.83