Question

Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dollar.) a. How much would you have to deposit today if you wanted to have $45,000 in five years? Annual interest rate is 8%. b. Assume that you are saving up for a trip around the world when you graduate in two years. If you can earn 7% on your investments, how much would you have to deposit today to have $11,500 when you graduate? (Round your answer to 2 decimal places.) C-1. Calculate the future value of an investment of $535 for nine years earning an interest of 12%. (Round your answer to 2 decimal places.) C-2. Would you rather have $535 now or $1,000 nine years from now? d. Assume that a college parking sticker today costs $66. If the cost of parking is increasing at the rate of 4% per year, how much will the college parking sticker cost in nine years? (Round your answer to 2 decimal places.) e. Assume that the average price of a new home is $113,000. If the cost of a new home is increasing at a rate of 9% per year, how much will a new home cost in nine years? (Round your answer to 2 decimal places.) f. An investment will pay you $6,500 in 10 years, and it will also pay you $230 at the end of each of the next 10 years (years 1 thru 10). If the annual interest rate is 6%, how much would you be willing to pay today for this type of investment? (Round your intermediate calculations and final answer to the nearest whole dollar.) g. A college student is reported in the newspaper as having won $7,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $7 million now. Instead she will receive $350,000 at the end of the year for each of the next 20 years. If the annual interest rate is 5%, what is the present value (today's amount') that she won? (ignore taxes). (Round your answer to nearest whole dollar.) 30,627 1,483.61 Now a. Present value b. Present value C-1. Future value c-2. Would you rather have $535 now or $1,000 nine years from now? d. Future value Future value Present value g. Present value 93.94 245,424.70 5,322 4,361,770

I need help with part b. Thank you.

Answer 1

Part b

PVF for 2 years at 7% = 0.87344
=PV(7%,2,0,-1,0) (a)	0.87344
Future Value (b)	$ 11,500.00
Present Value (a*b)	$10,044.55
If PVF is rounded to 4 decimals
Present Value (11500*0.8734)	$10,044.10