Find the following values.
compounding/discounting occurs annually.
a. an initial $500 compounded for 1 year at
6percent.
b. an initial $500 compounded for 2 years at
6percent.
c. the present value of $500 due in 1 year at a
discountrate of 6 percent.
d. the present value of $500 due in 2 years at a
discountrate of 6 percent.

Answer with Step-by-step explanation:

We are given that

a.P=$500

Time=1 year

r=6%

FV=

Where P=Present value

r=Annual rate of interest

n=Time(in year)

Using the formula

FV=$530

Hence, compounding value=$530

2.P=$500

n=2 years

%

Substitute the values then we get

FV=$561.8

Hence, compounding value=$561.8

3.Present value=$500

r=6%

n=1 year

Substitute the values

=$471.7

Hence, discounting value=$471.7

4.Present value=$500

r=6%

n=2 years

Substitute the values then we get

$445

Hence, discounting value=$445

answer: 20

step-by-step explanation: