## Thursday, 11 September 2014

### For each of the following, compute the future value (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)): Present Value Years Interest Rate Future Value \$ 2,500 12 12 % \$ 9,252 6 10 81,355 13 11 188,796 7 7 Explanation: To find the FV of a lump sum, we use: FV = PV(1 + r)t FV = \$2,500(1.12)12 = \$ 9,739.94 FV = \$9,252(1.10)6 = \$ 16,390.48 FV = \$81,355(1.11)13 = \$ 315,924.26 FV = \$188,796(1.07)7 = \$ 303,165.12 Calculator Solution: Note: Intermediate answers are shown below as rounded, but the full answer was used to complete the calculation. Enter 12 12% ±\$2,500 N I/Y PV PMT FV Solve for \$9,739.94 Enter 6 10% ±\$9,252 N I/Y PV PMT FV Solve for \$16,390.48 Enter 13 11% ±\$81,355 N I/Y PV PMT FV Solve for \$315,924.26 Enter 7 7% ±\$188,796 N I/Y PV PMT FV Solve for \$303,165.12

For each of the following, compute the future value (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)):

 Present Value Years Interest Rate Future Value \$ 2,500 12 12 % \$ 9,252 6 10 81,355 13 11 188,796 7 7

Explanation: