Relationship between the future and present value factor


Please assist with the given:

Problem 1. How many years in a typical perpetuity?

Problem 2. What is the relationship between the future value factor for five years at 5 percent and the present value factor for five years at 5 percent?

Problem 3. If a business manager deposits $30,000 in a savings account at the end of each year for twenty years what will be the value of her investment: at a compound rate of 12 percent? At a compounded rate of 18 percent? What would the outcome be in both cases if the deposits were made at the beginning of each year?

Problem 4. The chief financial officer of a home health agency needs to determine the present value of a $10,000 investment received at the end of year 10. What is the present value if the discount rate is:

a. 6 percent b. 9 percent c. 12 percent d. 15 percent?

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Finance Basics: Relationship between the future and present value factor
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