Calculate Answers to the Following Scenarios Using Present Value Tables

question 117

Essay

Calculate answers to the following scenarios using present value tables:
a.If $100 is deposited into an account paying 8 percent simple interest,what will be the value of the account in 5 years?
b.If an accumulation of $8,000 is desired at the end of 4 years,what amount must be deposited now to accomplish that goal,assuming 12 percent interest compounded annually?
c.What is the present value of $300 received at the end of each year for 4 years,assuming 9 percent interest compounded annually?
d.What amount must be deposited at the bank today to grow to $10,000 in 5 years,assuming 14 percent interest compounded semiannually?

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Definitions:

Monetary Policy

The process by which a country's central bank controls the money supply, often targeting an inflation rate or interest rate to ensure economic stability and growth.

Exchange Rate

The exchange rate of one currency relative to another for the purpose of conversion.

Trade Deficits

Occurs when a country's imports of goods and services exceed its exports, leading to more money leaving the country than coming in.

Saving Rate

The saving rate is the proportion of income that is not spent on consumption, but rather set aside for future use, often expressed as a percentage of total income.