MM 255 MM255 UNIT 5 ASSIGNMENT FUTURE VALUE AND PRESENT VALUE - KAPLAN
Kaplan MM255 Unit 5 Assignment Future Value and Present Value
Question 1: (10 Points)
Calculate the future value of an investment of $15,750, after 9 months, earning 3.8% APR, compounded monthly, by calculating manually.
Reminder: Be sure to show your work, and to calculate the period interest before solving.
Find the future value of a $12,000 Certificate of Deposit that pays compounded interest every three months at the rate of 8% per year. The CD has a term of 4 years.
a) Calculate the FV (Future Value) using the “Future Value or Compound Amount of $1.00” table in your textbook.
b) Calculate the FV (Future Value) using the formula: FV = P(1 + R)N
c) How much interest was earned on the investment?
Question 3: (10 Points)
You inherit $134,000 and decide to invest it for 90 days compounded daily at 7.25% annual interest (exact). After the 90 days, you are going to invest your new-found money in a startup business.
a) How much interest is earned on this investment?
b) How much money will you have to invest in the startup after the 90 days?
Question 4: (10 Points)
How much money must be invested into an account paying 6% annually, compounded semi-annually, to have $350,000 in 14 years when I retire?
a) Calculate the PV (Present Value) using the “Present Value of $1.00” table in your textbook.
b) Calculate the PV (Present Value) using the formula: PV = FV / (1 +R)N
c) How much interest did you earn over the life of the investment?
No comments:
Post a Comment