Mod2 SLP: Financial decision making

Question#1 S= 3800000 S= Future Value P= ?P= Present Value r= 5% r= interest rate t= 1 yr t= time S=P(1+rt) 3800= P(1+(0.05)(1)) P= $3619 Question#2 Account A Account B S= 4100 S= 5500 P= ?t= 2 yrs t= 1 yr P= ?r= 5% r= 5% S=P(1+rt) S=P(1+rt) 4100= P(1+(0.05)(1)) 5500= P(1+(0.05)(2)) P= $3905 P= $4989 Combined PV= 3905+4989= $8894 Question#3 S= 158000 r= 7% P= ?YEAR 1 t= 1 yr S=P(1+rt) 158000= P(1+(0.07)(1)) P= $147663.55 S= 246000 r= 7% P= ?YEAR 2 t= 2 yr S=P(1+rt) 246000= P(1+(0.07)(2)) P= $215789.47 S= 289000 r= 7% P= ?YEAR 3 t= 3 yr S=P(1+rt) 289000= P(1+(0.07)(3)) P= $238842.97 Amount you have to invest today for all 3 future payments is:P= $602296 Money on hand today is worth more than tomorrow, therefore it is important that we understand the concept of time value of money. This