Future Value . Fill in the future values for the following table using one of the three methods below : a . Use the future value formula , FV = PV *( 1 + r ) n . b . Use the TVM keys from a calculor . c . Use the TVM function in a spreadsheet .
P3 – 4 Future Value . Grand opening Bank is offering a one-time investment opportunity for its new customer . A customer opening a new checking account can buy a special saving bond for $ 400 today , Which the bank will compound at 8.5 % for the next ten years . The savings bond must be held for at least five years , but can then be cashed in at end of any year starting with years five . What is the value of the bond at each cashin date up through year ten ? What is the value of the savings bond at the end of year five ? a . What is the value of the savings bond at the end of year five ? b . What is the value of the savings bond at the end of year six ? c . What is the value of the savings bond at the end of year seven ? d . What is the value of the savings bond at the end of year eight ? e . What is the value of the savings bond at the end of year nine ? f . What is the value of the savings bond at the end of year ten ?
P 3 – 8 |
a . |
Use the present value formula , PV = FV * --- |
b . |
Use the TVM keys from a calculator . |
c . |
Use the TVM function in a spreadsheet . |
P3-15 Future Value . YOU are a new employee with the metro daily planet . The planet offers three different retirement plans . Plans 1 starts the first day of work and puts $ 1,100 away in your retirement acc at the end of every year for 40 years . Plan 2 starts after 10 year and puts away $ 2,100 every year for year . Plan 3 starts after 20 year and puts away $ 4,100 every year for the last 20 year 0 employment . All tree plans guarantee an annual growth rate of 11 %. a . Which plan should you choose if you plan to work at the Planet for 40 years ? b . Which plan should you choose if you plan to work at the Planet for only the next 30 years ? c . Which plan should you choose if you plan to work at the Planet for only the next 20 years ? d . Which plan should you choose if you plan to work at the Planet for only the next 10 years ? e . What do the answers in parts ( a ) through ( d ) imply about savings ?