Question

Tyler Town Corporation invested $22,000 in a 60-year(s) investment at 20% interest, compounding quarterly. What is the future value? (Enter answer as a positive number.) Amount Keystroke Step 1: 22,000 Step 2: Z Step 3: 240 Step 4: Answer: MAC Enterprises borrowed $19,000 from its bank at a 16% annual interest rate, compounded annually and will repay $30,000. Determine when MAC Enterprises will repay the loan. (Note: When entering Time Value of Money problems with two dollar amounts, one of the amounts must be negative. For this problem, use the drop-down to add the "+/-" button as a keystroke immediately before PV.) Amount Keystroke Step 1: 19,000 PY Step 2: 16 Step 3: 30,000 Step 4: Answer:

Answer 1

Solution 1. Initial Investment Time 22,000 60 years 20% p.a. Rate of Interest Compounding Quarterly Future Value = time Initial Investment x (1 + rate) $22000 x (1 + 20%/4)^60*4 $22000 x ( 1.05)^240 $22000 x 121739.60 $ 2,67,82,71,200 $ Solution 2. Initial Investment Rate of Interest Future Value 19,000 16% p.a. 30,000 $ Future Value $ 30,000 $ 30,000 $30000 / $19000 1.5789 Initial Investment x (1 + rate) ^ time $19000 x ( 1+ 16%) Atime $19000 x ( 1.16) Atime (1.16) ^ time (1.16)^time = In order to Compute the value of time, we will have to find the value which raised to the power make 1.16 into 1.5789 Power (1.16) power 1.1600 1.3456 1.5609 3.08 1.5795 4 1.8106 Thus, at power 3.08 value is almost equal. Thus, Time will be 3.08 years

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