Question

Find the following values for a lump sum assuming annual compounding. a. The future value of $800 invested at 7% for one year b. The future value of $800 invested at 7% for five years c. The present value of $800 invested at 7% for one year d. The present value of $800 invested at 7% for five years

Answer 1

Answer:

For the first 2 we calculate the future value:

(A)856

(B)1,122.04

(C) and (D) thre present value will be 800

Explanation:

$Principal * (1+ r)^{time} = Ammount$

$800* (1+ 0.07)^{1} = Ammount$

856

$800* (1+ 0.07)^{5} = Ammount$

1,122.041358

$\frac{856}{(1 + 0.07)^{1} } = 800$

$\frac{1,122.04}{(1 + 0.07)^{5} } = 800$