Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent.
a. An initial $400 compounded for 10 years at 6%.
$
b. An initial $400 compounded for 10 years at 12%.
$
c. The present value of $400 due in 10 year at 6%.
$
d. The present value of $1,845 due in 10 years at 12%.
$
e. The present value of $1,845 due in 10 years at 6%.
$
Define present value.
The present value is the value today of a sum of money to be received in the future and in general is less than the future value.
The present value is the value today of a sum of money to be received in the future and in general is greater than the future value.
The present value is the value today of a sum of money to be received in the future and in general is equal to the future value.
The present value is the value in the future of a sum of money to be received today and in general is less than the future value.
The present value is the value in the future of a sum of money to be received today and in general is greater than the future value.
How are present values affected by interest rates?