Practice 6.b

Your company will generate $58,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 8.75 percent, what is the present value?

$294,376.15 Calculator N= 7 I/Y= 8.75 FV= 0 PMT= -58,000 CPT PV= 294,376.15

If you put up $46,000 today in exchange for a 6.5 percent, 16-year annuity, what will the annual cash flow be?

$4,709.37 Calculator N= 16 I/Y= 6.5 PV= 46,000 PMT= 0 CPT FV= 4,709.37

You want to have $80,000 in your savings account 11 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.30 percent interest, what amount must you deposit each year?

$5,259.64 Calculator N= 11 I/Y= 6.3 FV= 80,000 PV= 0 CPT PMT= 5,259.64