FIN 200 Week 9 3. You will receive $5,000 three years from now. The discount rate is 8 percent.
Fin 200 Week 9 day 5 chapter 9
Fin 200 Week 9
Introduction to Finance: Harvesting the Money Tree
Axia College of University of Phoenix (UoP)
278 & 279 of Foundations of Financial Management
Present Value, Future Value, and Annuity Due
Resource: Ch. 9 of Foundations of Financial Management
Due Date: Day 5 [Individual forum]
Complete Problems 3, 4, and 5 on pp. 278-279.
a. What is the value of your investment two years from now? Multiply $5,000 .926 (one year’s discount rate at 8 percent).
b. What is the value of your investment one year from now? Multiply your answer to part a by .926 (one year’s discount rate at 8 percent).
c. What is the value of your investment today? Multiply your answer to part b by .926 (one year’s discount rate at 8 percent).
d. Confirm that your answer to part c is correct by going to Appendix B (present value of $1) for n 3 and i 8 percent. Multiply this tabular value by $5,000 and compare your answer to part c. There may be a slight difference due to rounding.
a. In 2 years at 9 percent?
b. In 7 years at 12 percent?
c. In 25 years at 14 percent?
d. In 25 years at 14 percent (compounded semi annually)?
