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    Exercise 1 Chapter 2

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    Ain Fatihah Azlan
    This document contains an exercise with 4 questions regarding calculating present and future values using interest tables. It provides: 1) Numerical values for various compound interest factors. 2) A calculation to determine how much can be afforded now for a cash flow saving $21,300 per year over 5 years at 10% interest. 3) A calculation to determine the future value after 7 years of deposits of $8,000 per year at 12% interest. 4) A multi-step calculation to find the present worth of cash flows of $2,000 after 8 years, $5,000 for 8 years, and $26,675 after 2 years at 8% interest.

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    Exercise 1 Chapter 2

    Uploaded by

    Ain Fatihah Azlan
    138 views3 pages
    This document contains an exercise with 4 questions regarding calculating present and future values using interest tables. It provides: 1) Numerical values for various compound interest factors. 2) A calculation to determine how much can be afforded now for a cash flow saving $21,300 per year over 5 years at 10% interest. 3) A calculation to determine the future value after 7 years of deposits of $8,000 per year at 12% interest. 4) A multi-step calculation to find the present worth of cash flows of $2,000 after 8 years, $5,000 for 8 years, and $26,675 after 2 years at 8% interest.

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    This document contains an exercise with 4 questions regarding calculating present and future values using interest tables. It provides: 1) Numerical values for various compound interest factors. 2) A calculation to determine how much can be afforded now for a cash flow saving $21,300 per year over 5 years at 10% interest. 3) A calculation to determine the future value after 7 years of deposits of $8,000 per year at 12% interest. 4) A multi-step calculation to find the present worth of cash flows of $2,000 after 8 years, $5,000 for 8 years, and $26,675 after 2 years at 8% interest.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    138 views3 pages

    Exercise 1 Chapter 2

    Uploaded by

    Ain Fatihah Azlan
    This document contains an exercise with 4 questions regarding calculating present and future values using interest tables. It provides: 1) Numerical values for various compound interest factors. 2) A calculation to determine how much can be afforded now for a cash flow saving $21,300 per year over 5 years at 10% interest. 3) A calculation to determine the future value after 7 years of deposits of $8,000 per year at 12% interest. 4) A multi-step calculation to find the present worth of cash flows of $2,000 after 8 years, $5,000 for 8 years, and $26,675 after 2 years at 8% interest.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Name : NOR AIN FATIHAH BT NOR AZLAN

    Matrix No : 261715
    Date : 26/10/2020

    EXERCISE 1 CHAPTER 2

    1. Look up the numerical value for the following factors from the interest table.
    a. (P/F, 6%, 8) = 0.6274
    b. (A/P, 10%, 10) = 0.16275
    c. (A/G, 15%, 20) = 5.3651
    d. A/F, 2%, 30) = 0.04116
    e. (P/G, 35%, 15) = 7.5974

    2. How much Sykt Acv afford to spend now on an energy management system if the
    software will save the company $21,300 per year for the next 5 years? Use an interest
    rate of 10% per year.
    P = A ( P/ A, I, n)
    = 21,300 ( P / A , 10% , 5 )
    = 21,300 ( 6.1446)
    = $ 130,879.98

    3. How much money would be available in year 10 if $8000 is deposited each year in years
    4 through 10 at an interest rate of 12% per year?
    F = A ( P/ A, I, n)
    = A( F/ A, 12% , 7)
    = 8000 ( 10.0890)
    = $ 80,712
    4. Find the present worth in year 0 for the cash flows shown using an interest rate of 8% per
    year.

    Step 1.

    Pg = F (P/ F, I , n)
    = $ 2000 ( P/ F, 10%, 8)
    = $ 2000 (0.4665)
    = $ 933

    Step 2.

    P a= A(P/A, I, n)
    = 5000 ( P / A, 10%, 8)
    = 5000 (5.3349)
    = $ 26,674.5

    Pao = F ( P / F,I,n)
    = $ 26,674.5 ( P / F, 10% , 2)
    = $ 26,674.5 ( 0.8264)
    = $ 22,043.81

    PT = Pg + Pa
    = $ 933 + $ 22,043.81
    = $ 22,976.81

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