PRESENT AND FUTURE VALUES FOR DIFFERENT INTEREST RATES
Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent.
a. An initial $800 compounded for 10 years at 7%. $
b. An initial $800 compounded for 10 years at 14%. $
c. The present value of $800 due in 10 year at 7%. $
d. The present value of $2,150 due in 10 years at 14%. $
e. The present value of $2,150 due in 10 years at 7%. $
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?