Mr. Zigong wishes to know about the future values of the single cash flow deposited today that will be available at the end of the deposit period if the interest is compounded annually at the rate specified over some specific period. For example, the situation for the first case is that single cash flow is 200$, interest rate is 5%, and deposit period is 20 years. Under second case, single cash flow is 4500$, interest rate is 8%, and deposit period is 7 years. Whereas under third case, single cash flow is 10,000$, interest rate is 9%, and deposit period is 10 years. In addition, under fourth case, single cash flow is 25,000$, interest rate is 10%, and deposit period is 12 years. Besides, under last case, single cash flow is 37000$, interest rate is 11%, and deposit period is 5 years, respectively.
Answers
Given : Different deposited amount , Rate of interest , and Time period
To Find : Amount available at the end of the deposit period
Solution:
Single cash flow = P
Rate of interest = R % per annum
Time period in years = n
Amount available at the end of the deposit period = A
A = P(1 + R/100)ⁿ
Case 1 :
P = 200 , R = 5 , n = 20
=> A = 200(1 + 5/100)²⁰ = 530.66
Case 2 :
P = 4500 , R = 8 , n = 7
=> A = 4500(1 + 8/100)⁷ = 7,712.21
Case 3 :
P = 10000 , R = 9 , n = 10
=> A = 10000(1 + 9/100)¹⁰ = 23,673.63
Case 4 :
P = 25000 , R = 10 , n = 12
=> A = 25000(1 + 10/100)¹² = 78,460.71
Case 5 :
P = 37000 , R = 11 , n = 5
=> A = 37000(1 + 11/100)⁵ = 62,347.1
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