Compute the future value of your deposit

Reference no: EM132028058

Question: Part 1. (Formula Practice) Please write formulas ONLY. (DON'T WASTE YOUR TIME HERE TO FIND THE ANSWER.) Assume annual compounding, unless otherwise specified.

1. Compute the present value of $500 to be received in 3 years. The discount rate is 5 percent.

2. Compute the future value of $500 that you invested today in 3 years. The interest rate is 5 percent.

3. You have $1,000 to deposit. Regency Bank offers 12 percent per year compounded monthly (i.e., 1 percent per month). Compute the future value of your deposit in 10 years.

4. Suppose you have $100 to invest. If you want to receive $500 at the interest rate of 10%, how long will you have to have it invested?

5. Suppose you have $100 to invest. If you want to receive $500 at the interest rate of 10% annually, but compounded quarterly, how long will you have to have it invested? Predict your answer compared to (4). Will it be longer or shorter than the answer from (4)?

Reference no: EM132028058

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