If the investment period is for 7 years, then A(P) = Pe0.04+7= Pe028 Find a formula for A'(P) Find and interpret A'(8000). a b. c. Compare the approximation to the actual change,
Q: Your credit card company charges you 1.44 percent per month. What is the EAR on your credit card?…
A: Effective annual rate of interest (EAR) = (1 + r)^t - 1r = rate of interest = 1.44% t = time = 12
Q: What are the Future Contracts at NSE currently?
A: Future contract- It is standardized contract traded on an organized stock exchange.
Q: What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $850,…
A: A bond’s yield is the return to investors. Bond issuers pay coupons or interests to investors or…
Q: You are going to receive three perpetuities. Perpetuity 1 will pay $450 each year, with the first…
A: A perpetuity is a cash flow or an annuity that goes on forever. To solve this question we need to…
Q: Kaye deposited $7.000 into a savings account today. For how long can $680 be withdrawn from the…
A:
Q: cheduled payments of $503, $1303, and $975 are due in one-and-a-half years, three-and-a-half years,…
A: To calculate the equivalent single replacement payment, we need to find the present value of each of…
Q: 3. * Assuming 365 days in a financial year answe (a) Find the discounted value of $500 due in 8 (b)…
A: In this we will be calculating the discounted value of $500 which is due in 82 days at 9% , with…
Q: Given the cash flows in actual dollars provided in the following table, calculate the present worth…
A: Present value (PV) is a financial concept that refers to the current worth of a future sum of money…
Q: In December 2018, Apple had cash of $86.58 billion, current assets of $140.87 billion, and current…
A: Current Ratio / Quick Ratio / Operating Cash Flow Ratio Current Ratio - Current Asset / Current…
Q: Your bank account pays an interest rate of 6 percent, but this interest is compounded daily (use…
A: Interest rate on account = 6% (compounded daily) Amount A = P(1 + r/n)nt Where A = amount P =…
Q: You take out a 30-year mortgage (360 months) with a face value of $200,000 and a stated annual rate…
A: When you take out a mortgage you have to make periodic constant payments towards that mortgage.…
Q: You have purchased a 10% coupon bond for $1,040. What will happen to the bond's price if market…
A: Bond valuation is the process of determining the fair value or market price of a bond. The value of…
Q: UF issued a 20-year bond that pays a semi-annual coupon of $32.00, has a par value of $1,000, anc a…
A: Call Premium: It represents the excess amount over the face value/par value of a bond that the…
Q: Using the conservative discount rate, what is the value of the tuition the day you start the law…
A: PV of a growing annuity implies that the payment is fixed and they are growing at a fixed rate,…
Q: Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt…
A: Bond pricing refers to the process of determining the value or worth of a bond. The price of a bond…
Q: Hamilton, Inc. bonds have a coupon rate of 11 percent. The interest is paid semiannually, and the…
A: Value of a bond or price of a bond is the present value of all future cash flows associated with the…
Q: The year Alan graduated college, he got a job as an entry-level software engineer working for a firm…
A: A score's connection to the mean within a set of scores is statistically measured by a Z-Score. A…
Q: How much must you deposit into an account that pays 5% each year to have a balance of $750 after 5…
A: Using PV formula we can determine what amount you need to deposit into the account today. The PV…
Q: IFRS stands for “Introductory Financial Reporting Standards.” Question 12 options: 1) False…
A: IFRS is a set of accounting standards developed by the International Accounting Standards Board…
Q: Q2-3: Calculating Total cash flows NMB Company shows the following information on its 2020 income…
A: A cash flow statement is a financial statement that provides information about the inflow and…
Q: Anita is considering the purchase of a five year annuity of 10 semiannual payments of $6,000 made at…
A: Annuity refers to the fixed amount to be received by the insurer for the rest of the life against…
Q: A 9-year project is expected to provide annual sales of $225,000 with costs of $98,000. The…
A: Operating Cash Flow (OCF) is a financial metric that measures the amount of cash generated from a…
Q: What is the present value of $2,000 paid at the end of each of the next 95 years if the interest…
A: An annuity is a financial product that provides a series of regular payments over a specified period…
Q: 4. The share capital of the company is 46 million rubles and consists of 24 thousand common shares.…
A: An entity can raise funds from multiple sources. Debt and equity are the major funding sources a…
Q: The sales literature of a mutual fund claims that the fund has no risk exposure since it invests…
A: Federal government securities consist of securities that are issued by the federal government.…
Q: The property taxes on a house were $1860. What was the tax rate if the house was valued at $155,000?…
A: Property Tax Rate = Property Tax on house / Value of house
Q: Question 1 Alfred Yeo is an importer of European Cars into Singapore. He has recently entered a…
A: The current exchange rate between two currencies on the foreign exchange is known as a spot rate. It…
Q: Problem #5: A loan of $53,000 is paid off in 36 payments at the end of each month in the following…
A: The money's time worth concept states that any sum of money is worth more currently as compared to…
Q: One of your customers has just made a purchase in the amount of $27,200. You have agreed to payments…
A: Step 1 The average number of days it takes a business to meet its unpaid commitments to its…
Q: For the year 2000, Young, Inc has cash $121, Accounts Receivables $425, Inventory $410, Net Fixed…
A: Cash coverage ratio determines how many times the cash from operating activities will be able to…
Q: "You founded your firm with a contribution of $500,000, receiving 2,000,000 shares of stock. Since…
A: Upon seeing a promising opportunity, angel investors offer startups and small enterprises the…
Q: An industrial engineering startup pains to purchase software with payemnts $500 per year's…
A: Here, Cash Flow in year 1 is $500 Increase in cash flow (G) is $50 Interest Rate (i) is 10% Time…
Q: You are valuing an investment that will pay you $26,000 per year for the first 9 years, $34,000 per…
A: To determine the value of the investment today, we need to determine the PV of each annuity and then…
Q: Can you make the answer of number 5 a well-explained or thoroughly explained?
A: The coefficient of variation is a statistical tool that measures the risk level by considering the…
Q: You take out a 30-year mortgage (360 months) with a face value of $200,000 and a stated annual rate…
A: To solve this problem we need to make a loan amortization table. The loan amortization table shows…
Q: What is the ultimate objective of financial management? Question 7 options: to ensure the…
A: Financial management is the process of planning, organizing, controlling, and monitoring the…
Q: 5-70 The following costs are associated with three tomato-peeling machines being considered for use…
A: Machine A Machine B Machine C First Cost $52000 $ 63000 $67000 Annual Benefit…
Q: Consider a 20-year Government of Canada bond with a face value of $1,000 that has a coupon rate of…
A: A coupon payment is a regular payment made by a bond issuer to bondholders. The payment is a portion…
Q: You are offered the right to receive $2,000 per year forever, starting in one year. If your discount…
A: Right to receive per year forever is perpetuity. Present value of perpetuity is annual amount/…
Q: Amit borrowed $2000 at a simple interest rate of 5.5% per annum. At the end of the term, he owed…
A: Step 1 Simple Interest When someone lends money to a borrower, the borrower typically has to pay the…
Q: A bond with a face value of $6,000 pays quarterly interest of 2.5 percent each period. Twenty-six…
A: A bond is a debt instrument used to raise capital from investors. It pays back in the form of…
Q: An investor purchased 50 shares of stock in a company for $50 per share. One year later, the…
A: Rate of Return = Total Profit / Purchase cost of shares
Q: after
A: So per quarter k = 10/4= 2.5%, Loan Maturity = 10 years= 10* 4= 40 times = n We must know the…
Q: What are journals used for in the accounting cycle? Question 14 options: as the books of…
A: In accounting, a journal is a book or electronic record where transactions are recorded in…
Q: The following table summarizes prices of various default-free zero-coupon bonds (expressed as a…
A: A bond’s yield to maturity is the total return that the buyer receives from the time bond is…
Q: The IRR of the project is _____ %?
A: IRR refers to the internal rate of return. It is the rate at which NPV of a project is nil.
Q: What are the advantages and disadvantages of direct lending for the bank? How are banks reducing the…
A: Direct lending refers to a type of lending that is provided directly by the lender, such as a bank,…
Q: With bond valuation, there are many terms to understand specific to bonds. Take one of these terms…
A: Bond valuation is the process of determining the fair value or market price of a bond. Bond…
Q: Schultz Industries is considering the purchase of Arras Manufacturing. Arras is currently a supplier…
A: Firm Valuation: The process of determining the overall economic value of a company and its assets is…
Q: Given the cash flows in actual dollars provided in the following table, calculate the present worth…
A: Present value refers to the current worth of a future sum. The present value computation requires…
Step by step
Solved in 3 steps
- To calculate how many years (n) an investment (P) must be kept in an account that earns interest at i%, in order to triple in amount, which of the following expressions should be used? (a) n = -P + F(P/F, i%, n) (b) n = [log (F/P)]/[log (1+ i%)] (c) n = [ In(– P +F)]/[In i%] (d) n = -F(1 + i%)P*Using Matlab* The current amount A of a principal P invested in a savings account paying an annual interest rate r is given by A = P(1+r/n)^(nt) where n is the number of times per year the interest is compounded. For continuous compounding, A = Pe^(rt). Suppose $10,000 is initially invested at 2.5 percent (r = 0.025). a. Plot A versus t for 0 ≤ t ≤ 20 years for four cases: continuous compounding, annual compounding (n = 1), quarterly compounding (n = 4), and monthly compounding (n = 12). Show all four cases on the same subplot and label each curve. On a second subplot, plot the difference between the amount obtained from continuous compounding and the other three cases. b. Redo part a, but plot A versus t on log-log and semilog plots. Which plot gives a straight line?The current amount A of a principal P invested in a savings account paying an annual interest rate r is given by A = P(1+r/n)^(rt) where n is the number of times per year the interest is compounded. For continuous compounding, A = Pe^(rt). Suppose $10,000 is initially invested at 2.5 percent (r = 0.025). a. Plot A versus t for 0 ≤ t ≤ 20 years for four cases: continuous compounding, annual compounding (n = 1), quarterly compounding (n = 4), and monthly compounding (n = 12). Show all four cases on the same subplot and label each curve. On a second subplot, plot the difference between the amount obtained from continuous compounding and the other three cases. b. Redo part a, but plot A versus t on log-log and semilog plots. Which plot gives a straight line?
- Assume that at the beginning of the year, you purchase an investment for $6,300 that pays $130 annual income. Also assume the investment's value has increased to $6,900 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places. Rate of return % b. Is the rate of return a positive or a negative number? Positive NegativeAssume that at the beginning of the year, you purchase an investment for $7,200 that pays $100 annual income. Also assume the investment's value has decreased to $6,800 by the end of the year. (a) What is the rate of return for this investment? (Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.) Rate of return % (b) Is the rate of return a positive or negative number? Positive O NegativeAssume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual income. Also assume the investment's value has increased to $7,050 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.
- b1. F = Pert , which assumes continuous compounding, says that the Future value (F) of an amount (P) invested today at an annual rate (r), expressed as a decimal for the time (t), in years is given by the function. Thus if you invested $100 at the annual rate of 5 1/2% for 6 years and 3 months you would get back (at the end of the time), F = $100e(0.055)(6.25) = $100e(0.3438) = $100(1.4102) = $141.02. If you invest $15000 today, what amount does the formula say you will get back if you leave it for 5 years and 3 months in a savings account paying 4 1/2% annually?Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was 15.3 percent and the standard deviation of this asset for the period was 33.2 percent. Use the NORMDIST function in Excel® to answer the following questions. a. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g., 32.161.) b. What is the approximate probability that your money will triple in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 8 decimal places, e.g., 32.16161616.)Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $288,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $36,000. The company's minimum desired rate of return for net present value analysis is 12%. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Compute the following: a. The average rate of return, giving effect to straight-line depreciation on the investment. If required, round your answer to one decimal place. 8 X %
- Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was 16.3 percent and the standard deviation of this asset for the period was 33.5 percent. Use the NORMDIST function in Excel® to answer the following questions. a. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g., 32.161.) b. What is the approximate probability that your money will triple in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 8 decimal places, e.g., 32.16161616.) a. b. X Answer is complete but not entirely correct. Probability Probability 0.624 % 0.00000200 X %When an initial amount of P dollars is invested at r% annual interest compounded n times per year, the value of the account (4) after years is given by the equation nt A=P(1 + =)** n Write an equation that represents the value in an account that starts out with an initial investment of $5000 and pays 10% interest compound monthly. Then use that equation to fill the table and use the table to graph the equation. Years (1) Value (4) 0 5 10 15 20 oo → KIAn investment accumulates at a force of interest δt = 0.01t / (3 + 0.01t^2) . Find the present value at time t = 0 of $3,900 due at the end of 7.5 year.