Calculation Of Net Present Value And Future Value

Question

1. What is the present value (PV) of $80000 received ten years from now, assuming the interest rate is 5% per year, compounding annually?

A. $38422.76
B. $40000.00
C. 49113.06
D. 76000.00

2. An investor can invest $1000 at the start of a certain year, then $1000 at the end of that year and the next year in a certain business. The business guarantees that the investor will receive a payment at the end of the year in five years. What is the future value (FV) of that payment if the investor is to breakeven, given that the discount rate over those five years is 6% per year?

A. $2002
B. $2681
C. $3000
D. $3792

Summary

These short questions belong to Finance. The 1st question is about calculating the net present value received ten years from now with an interest rate of 5% per year. The 2nd question is about calculating future value of an investment.

Total Word Count 21

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