Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually

a.) Given: Principal (P) = $600 Interest rate (r) = 6%© Time in years (t) = 1 year Compounding periods (n) = Annually  Required: Future value (FV) of investment  Formula: FV = P (1 + 1 \ (t} (n} ni  Where: FV = future value P = principal r = nominal interest rate n = number of compounding periods per year t = number of years  Solve for future value: FIT = P (1 + I) (t)(11) n = $600 (1 + 0.06 (1)(1) 1 = $600(1.06)1 = $636.

b.) Given: Principal (P) = $600 Interest rate (r) = 6%© Time in years (t) = 2 years Compounding periods (n) = Annually  Required: Future value (FV) of investment  Formula: FV = P (1 + 1 \ (t} (n} ni  Where: FV = future value P = principal r = nominal interest rate n = number of compounding periods per year t = number of years  Solve for future value: FIT = P (1 + I) (t)(11) n = $600 (1 + 0.06 (2)(1) 1 = $600(1.06)2 = $674.16.

c.) Given: Future value (FV) = $600 Interest rate (r) = 6%© Time in years (t) = 1 year Compounding periods (n) = Annually  Required: Present value (PV) of investment  Formula: PV =  FV  (1 + r (t)(n) n l  Where: FV = future value PV = present value r = nominal interest rate n = number of compounding periods per year t = number of years  Solve for present value:  PV = FV  (1 + r )(t)(n) —n $600  + 0.06)(1)(1) Cl  — 1 _  $600 — (1.06)1- = $566.04 

d.) Given: Future value (FV) = $600 Interest rate (r) = 6%© Time in years (t) = 2 years Compounding periods (n) = Annually Required: Present value (PV) of investment Formula: PV =  FV  (1 + n(t)(11) nl  Where: FV = future value PV = present value r = nominal interest rate n = number of compounding periods per year t = number of years Solve for present value: PV = 

FV  (1 + r )(t)(n) —n 

$600  + 0.06)(2" Cl   I 

_  $600 - (1.06) 2 = $534