Quiz 27: P27: Time Value of Money Compound

Business

In each part of the exercise, determine the part of the worksheet used, the amount of the payment, the interest rate, the timing of the first payment, the number of payments, and the final answer. Input the data into the worksheet that has the formulas already entered. a. If you invest $500 in an account today, what amount will it grow to at 10% interest in five years b. Someone invests $500 in an account at the beginning of every year for five years. If the interest rate is 10%, what amount will it grow to c. Someone promises to pay $500 in five years if you loan him some money right now. If you want to earn 10% interest, what would you be willing to loan him today d. Someone promises to pay $500 at the end of each year for the next five years if you will loan her some money today. If you want to earn a 10% interest, what would you be willing to loan her now The answers to each question are seen below: img

Open and review the worksheet indicated. In this problem you will be using future values and present values to answer questions in an additional section called the answer section. The unedited file will look like this: img

In each part of the exercise, determine the part of the worksheet used, the amount of the payment, the interest rate, the timing of the first payment, the number of payments, and the final answer. Input the data into the worksheet that has the formulas already entered. a. You invest $500 in an account today. If it has an interest rate of 10% that is compounded semiannually for five years, how much will it grow to b. You invest $500 in an account today. If it has an interest rate of 10% that is compounded quarterly, how much will it grow to c. You invest $500 in an account today. If it has an interest rate of 10% that is compounded monthly, how much will it grow to When you have entered the information into the table, your answers should be this: img

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