ALTERNATIVE PROBLEMS AND SOLUTIONS

ALTERNATIVE PROBLEMS

5-1A. (Compound Interest) To what amount will the following investments accumulate?

a. $4,000 invested for 11 years at 9% compounded annually

b. $8,000 invested for 10 years at 8% compounded annually

c. $800 invested for 12 years at 12% compounded annually

d. $21,000 invested for 6 years at 5% compounded annually

5-2A. (Compound Value Solving for n) How many years will the following take?

a. $550 to grow to $1,043.90 if invested at 6% compounded annually

b. $40 to grow to $88.44 if invested at 12% compounded annually

c. $110 to grow to $614.79 if invested at 24% compounded annually

d. $60 to grow to $73.80 if invested at 3% compounded annually

5-3A. (Compound Value Solving for i) At what annual rate would the following have to be invested?

a. $550 to grow to $1,898.60 in 13 years

b. $275 to grow to $406.18 in 8 years

c. $60 to grow to $279.66 in 20 years

d. $180 to grow to $486.00 in 6 years

5-4A. (Present Value) What is the present value of the following future amounts?

a. $800 to be received 10 years from now discounted back to present at 10%

b. $400 to be received 6 years from now discounted back to present at 6%

c. $1,000 to be received 8 years from now discounted back to present at 5%

d. $900 to be received 9 years from now discounted back to present at 20%

5-5A. (Compound Annuity) What is the accumulated sum of each of the following streams of payments?

a. $500 a year for 10 years compounded annually at 6%

b. $150 a year for 5 years compounded annually at 11%

c. $35 a year for 8 years compounded annually at 7%

d. $25 a year for 3 years compounded annually at 2%

5-6A. (Present Value of an