MATH

posted by MARISSA

Use the following time value of money tables to answer the following questions. Assume that the annual rate of interest is 6% for each of the four following problems.

i = 6%
Time Periods (n)
Future Value
of 1 Present Value
of 1 Future Value of an Annuity Present Value of an Annuity
3 1.19102 .83962 3.18360 2.67301


i = 3%
Time Periods (n)
Future Value
of 1 Present Value
of 1 Future Value of an Annuity Present Value of an Annuity
6 1.19405 .83748 6.46841 5.41719


1. Determine the future value of a $2,000 deposit made on January 1, 2011 on December 31, 2013 if the bank compounds interest annually.







2. Compute the present value of an amount of money on January 1, 2011 if its future value is $5,000 on December 31, 2013 and interest compounds semiannually.






3. Calculate the future value of a $1,000 annuity on December 31, 2013 if the firm makes annual deposits on December 31, 2011, December 31, 2012, and December 31, 2013.






4. Determine the present value on January 1, 2011 of $500 annuity payments made on each June 30 and December 31 from 2011 through 2013.

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