Bruce SutterDiscount Rate = i 20%Periods = n 5 PV * FVIF = FVPresent V

QUESTION

Bruce SutterDiscount Rate = i 20%Periods = n 5 PV * FVIF = FVPresent Value of Investment -2,000FVIFDiscount Rate = i 15%Periods = n 3 PV * FVIF = FVPresent Value of InvestmentFVIF
Bruce Sutter Discount Rate = i 20% Periods = n 5 PV * FVIF = FV Present Value of Investment -2,000 FVIF When the discount rate is 20% and the number of periods is 5, the FVIF is 2.48832. (This can be found looking up in a table or using a financial calculator and entering number of periods = 5, interest rate = 20, present value = 1, payment = 0, end of period, solve for future value and get 2.48832) The FVIF is 2.48832. The future value is the present value times the FVIF; 2.48832*2,000 = 4976.64. Discount Rate = i 15% Periods = n 3 PV * FVIF = FV Present Value of Investment FVIF When the discount rate is 15% and the number of periods is 3, the FVIF is 1.520875. (This can be found by looking up on a table or using a financial calculator and entering number of periods = 3, interest rate = 15, present value = 1, payment

= 0, end of period, solve for future value and get 1.520875) The FVIF is 1.520875. The future value would be the present value multiplied by the FVIF. (Present value isnt there, but for example if it were 100, then future value would be 100*1.520875 = 152

ANSWER:

CLICK REQUEST FOR  AN EXPERT SOLUTION