The concept of present value in relation to compound interest is essentially about determining the current value of a forthcoming sum of money or a series of cash flows, considering a particular rate of return. The calculation involves a specific formula that factors in the future sum, the rate of interest, and the duration of time.
| Topic | Problem | Solution |
|---|---|---|
| None | Chapter 4 Section D Suppose that on January 1 you… | Given that the balance on the credit card is $3000, the APR is 12%, and the time to pay off is 3 ye… |
| None | What payment, made at the end of each year for 9 … | Given that the future value (FV) is $13,800, the annual interest rate (r) is 6% or 0.06 in decimal … |
| None | Langara Woodcraft borrowed money to purchase equi… | This problem involves calculating the present value of an annuity due. The formula for the present … |
| None | What cash payment is equivalent to making payment… | \( r = \frac{11\%}{4} \div 3 = 0.916667\% \) |
| None | A person donated $\$ 180,000$ to a university to … | The problem is asking for the amount that needs to be deposited every 3 months in order to accumula… |
| None | Find the present value of an annuity with payment… | Given an annuity with payments of $600 at the end of every three months for 9 years. The interest r… |
| None | Starting six months after her grandson Robin's bi… | First, we calculate the future value of the deposits made by Mrs. Devine using the formula for the … |
| None | How much must be deposited at the end of each mon… | The problem is asking for the monthly deposit needed to accumulate a certain amount after a certain… |
| None | Hunan bought a car priced at $\$ 15,600$ for $15 … | Hunan bought a car priced at \$15,600. The down payment is 15\% of the total price, which is \$15,6… |
| None | Starting three months after her grandson Robin's … | Let's denote the amount of each deposit as \(P = \$100\) |
| None | A contract can be fulfilled by making an immediat… | The problem is asking for the size of the monthly payments given a certain interest rate and a tota… |
| None | You want to receive $\$ 600$ at the end of each y… | Given that the annuity payment (PMT) is $600, the interest rate per period (r) is 5.1% or 0.051, an… |
| None | A credit union entered a lease contract valued at… | The problem is asking for the size of the quarterly payment for a lease contract. This is a problem… |
| None | An installment contract for the purchase of a car… | Given that the monthly payment (PMT) is $260.41, the annual interest rate (r) is 5% or 0.05, the nu… |
| None | Suppose that you borrow $\$ 16,000$ for three yea… | Given that the principal amount of the loan (P) is $16,000, the annual interest rate (r) is 6% or 0… |
| None | How much should you deposit at the end of each mo… | Given that the future value (FV) is $3 million, the monthly interest rate (r) is 7.5% / 12 / 100, t… |
| None | How much money should be deposited today in an ac… | We are given the future value (FV), the interest rate (r), the number of compounding periods per ye… |
| None | Fritz Benjamin buys a car costing $\$ 5700$. He a… | Given that Fritz Benjamin buys a car costing $5700. He agrees to make payments at the end of each m… |
| None | Find the amount necessary to fund the given withd… | We are given that the monthly withdrawals are $600, the interest rate is 6.9% compounded monthly, a… |
| None | Use the present value formula to determine the am… | Given that the desired accumulated amount is $50,000 after 13 years invested in an account with 4.8… |
| None | The Continental Bank advertises capital savings a… | Given that the initial investment (PV) is $2500, the annual interest rate for the Continental Bank … |
| None | Scheduled payments of $\$ 226$ due one year ago a… | First, we need to calculate the present value of the two payments due one year ago and six years fr… |
| None | Two debts, the first of $\$ 1800$ due nine months… | Given two debts, the first of $1800 due nine months ago and the second of $900 borrowed two years a… |