FIN 419 ASSIST Career Path Begins/fin419assist.com FIN 419 ASSIST Career Path Begins/fin419assist.com | Page 13
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 cash-in
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.