Question part 1 formula practice please write formulas only, Ask an Expert

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Question: Part 1. (Formula Practice) Please write formulas ONLY. (DON'T WASTE YOUR TIME HERE TO FIND THE ANSWER.) Assume annual compounding, unless otherwise specified.

1. Compute the present value of $500 to be received in 3 years. The discount rate is 5 percent.

2. Compute the future value of $500 that you invested today in 3 years. The interest rate is 5 percent.

3. You have $1,000 to deposit. Regency Bank offers 12 percent per year compounded monthly (i.e., 1 percent per month). Compute the future value of your deposit in 10 years.

4. Suppose you have $100 to invest. If you want to receive $500 at the interest rate of 10%, how long will you have to have it invested?

5. Suppose you have $100 to invest. If you want to receive $500 at the interest rate of 10% annually, but compounded quarterly, how long will you have to have it invested? Predict your answer compared to (4). Will it be longer or shorter than the answer from (4)?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92864710

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