Problem: Use equations and a financial calculator to find the following values.
a. An initial 500 compounded for 10years at 6 percent
b. An initial 500 compounded for 10 years at 12 percent
c. The present value of $500 due in 10 years at a 6 percent discount rate.
d. The present value of $1,552.90 due in 10 years at a 12 percent discount rate and at a 6 percent trate. Give a verbal definition of the term present value and illustrate it using a time line with data from this problem. As a part of your answer, explain why present values are dependent upon interest rates.
PV=Future Value / (1+discount rate)^number of years
PV=1552.90/(1+12%)^10=500
Please show your formula.