Question

1. What is the future value of 1000 earnings 3% per year for 50 months?

2. What is yhe present value of 1000000 receuved 50 years from now, if you wish to earn 3% per yeat interest?

3. What is the present value of 10000 per month received over the next 2 years. if you wish to each 2% interest?

4.If I deposit 5000 per year in my savings earning 2.5% interest how much would i have in 50 years?

Answer 1

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Ans to 1	A=P*(1+i)^n
A=	Future Value
P=	1000
i=	3%=	0.03
n=	no of years=	50 months=	50/12 years
A=	1000*(1+.03)^(50/12)
A=	1000*(1.03)^(50/12)
Future Value	1,131.07
Ans to 2	A=P*(1+i)^n
A=	Future Value	1,000,000.00
P=	Present Value
i=	3%=	0.03
n=	no of years=	50
1000000=	P*(1+.03)^50
P=	1000000
	(1+.03)^50
P=	1000000
	4.38
Present Value	228,107.08
Ans to 3	P*(1-(1/(1+r)^n)
	r
P	Monthly Payment	10,000.00
i	Interest rate	2%
r	rate per period	2/12%	0.001667
n	number of periods	2 years	24 months
Present Value	10000*(1-(1/(1+.001667)^24)
	0.001667
Present Value	10000*(1-(1/(1.001667)^24)
	0.001667
Present Value	10000*(1-0.960813756709294)
	0.001667
Present Value	10000*0.039186243290706
	0.001667
Present Value	391.8624329
	0.001667
Present Value	235,117.46
Ans to 4	A=P*((1+i)^n-1)
	r
A=	Future Value
P=	5,000.00
i=	2.5%=	0.025
n=	no of years=	50
A=	5000*((1+.025)^50-1)
	0.025
A=	5000*(3.43710871970354-1)
	0.025
A=	5000*2.43710871970354
	0.025
A=	12185.5436
	0.025
Future Value	487,421.74