## 5-Minute Work-out for Compounding and Discounting

Prepared by Pamela Peterson Drake

## Compounding

```          Given:                                           Solve for:

Problem   Present      Number of         Rate per period   Future value
value        periods

1         \$2,500       5                 4%

2         \$150,000     10                3%

3         \$10          15                4%

4         \$250         10                5%

5         \$1,500       3                 10%

```

## Discounting

```          Given:                                           Solve for:

Problem   Future       Number of         Rate per period   Present value
value        periods

1         \$1,000       5                 3%

2         \$100,000     5                 4%

3         \$1,000,000   20                5%

4         \$20          5                 4%

5         \$1,000,000   10                10%

```

## Compounding

```          Given:                                             Solve for:

Problem   Present           Number of        Rate per        Future value
value             periods          period

1         \$2,500            5                4%              \$3,041.63

2         \$150,000          10               3%              \$201,587.46

3         \$10               15               4%              \$18.01

4         \$250              10               5%              \$407.22

5         \$1,500            3                10%             \$1,996.50

```

Discounting

```               Given:                                          Solve for:

Problem        Future           Number of       Rate per       Present value
value            periods         period

1              \$1,000           5               3%             \$862.61

2              \$100,000         5               4%             \$82,192.71

3              \$1,000,000       20              5%             \$376,889.48

4              \$20              5               4%             \$16.44

5              \$1,000,000       10              10%            \$385,543.29

```