Answer Happy

Consider a future value of $500, 5 years in the future. Assume that the nominal interest rate is 9.00%. If you are calculating the present value of this cash flow under semiannual (twice per year) compounding, you would enter for I/Y into your financial calculator. Entering in the values you just calculated for N and I/Y, along with a PMT=0 and a FV=$500, into a financial calculator yields a present value of approximately $ with semiannual compounding. If you are calculating the present value of this cash flow under quarterly (four times per year) compounding, you would enter for I/Y into your financial calculator. for N and Suppose now that the cash flow of $500 only 1 year in the future. Entering in the values you just calculated for N and I/Y, along with a PMT=0 and a FV=$500, into a financial calculator yields a present value of approximately $ with quarterly compounding. If you are calculating the present value of this cash flow under quarterly (12 times per year) compounding, you would enter for I/Y into your financial calculator. for N and for N and Entering in the values you just calculated for N and I/Y, along with a PMT=0 and a FV=$500, into a financial calculator yields a present value of approximately $ with monthly compounding.