Answered: You decide to save $75,000 at each…

You decide to save $75,000 at each year-end for three years. If the interest rate is 8% compounded quarterly, the future value at the end of year 3 is _______. A. 243,480 B. 244,049 C. 283,435

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 5P

See similar textbooks

Related questions

Q: a. What is the net price factor of a 25/19 series of trade discounts? net price______ b. A…

A: A trade discount is a reduction in the price of financial instruments or securities, such as bonds…

Q: (Related to Checkpoint 5.2) (Future value) Leslie Mosallam, who recently sold her Porsche, placed…

A: Compounding is a technique to compute the future value (FV) of present cashflows by considering a…

Q: A 5-year project is expected to generate annual sales of 8,800 units at a price of $75 per unit and…

A: We can determine the change in operating cash flow using the formula below:

Q: Atlas Home Supply has paid a constant annual dividend of $2.40 a share for the past 15 years.…

A: Current dividend, D0 = $2.40 per shareExpected growth rate, g = 10% Liquidated dividend in year 6,…

Q: What is the modified internal rate of return (MIRR) of each project? O MIRRS= 40.55%; MIRRL = 6.35%…

A: MIRR stands for Modified Internal Rate of Return. It is a financial metric used to evaluate the…

Q: The stock of Business Adventures sells for $40 a share. Its likely dividend payout and end-of-year…

A: 1.Standard deviation of stock = 2. Expected return of Portfolio Comprising of two stocks is…

Q: the effective cost of credit in the following case: 2,

A: Companies give discount for early payment of bills but there is a loss of credit period and that…

Q: Rating agencies—such as Standard & Poor’s (S&P) and Moody’s Investor Service—assign credit ratings…

A: Investment-grade bonds-Such bonds are issued by low risk to medium risk lenders and pay low…

Q: You have a student loan of 40,0005s that you want to repay in 10 years interest rates are at year…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: You are an analyst working for Goldman Sachs, and you are trying to value the growth potential of a…

A: Future opportunities are those opportunities that are going to generate benefits in the future for…

Q: se that you sell for 8 dollars a call option with a strike price of 45 dollars, and you sell for 13…

A: Option contracts are financial derivatives that provide purchasers the option, but not the…

Q: You are thinking about buying a savings bond. The bond costs $48 The bond will earn an annual rate…

A: Present Value = pv = $ 48Time = t = 12 YearsFuture Value = fv = $ 98

Q: Simpson Glove Company has made the following sales projections for the next six months. All sales…

A: To prepare a monthly cash receipts schedule for Simpson Glove Company for March through August, we…

Q: Your company has purchased a new piece of equipment for $1,000,000 and the equipment has a useful…

A: Initial Cost = i = $1,000,000Annual Cost = c = $500,000Time = t = 5 YearsRate of Return = r = 10%

Q: Consider the following returns: Period United States {:[" United "],[" Kingdom "]:} Exchange Rate 1…

A: We can determine the average return by taking the sum of the returns and dividing it by the number…

Q: Required information [The following information applies to the questions displayed below. A pension…

A: Required:Portfolio Invested in Stock =?Portfolio invested in Bond Fund =?Expected Return of Optimal…

Q: Dax Industrial Systems has stock currently priced at $50.00 per share. If investors are earning a 7%…

A: P = whereP= current stock priceD = annual dividend payment per sharer = Required return

Q: Mary can finish a puzzle of 500 pieces in 2 hours. How long will it take her to finish a puzzle of…

A: First we need to calculate puzzle solved per hour.Puzzles solved per hour =Total puzzle solved/Total…

Q: Determine the interest payment for the following three bonds (Assume a $1,000 par value.) (Round…

A: Bonds are a kind of loan in which only interest payments done each period and par value is paid on…

Q: Solve the problem. 3) Total profit is defined as total revenue minus total cost. R and C are the…

A: Number of televisions sold, x = 50 The total revenue from sales is The total costs is

Q: Assume the following relationships for the Caulder Corp.: Sales/Total assets 2.1× Return on assets…

A: The overall indication of the yield percentage of the company from all the activities is denoted by…

Q: The main difference between sales finance and consumer finance is: The length of time until the loan…

A: Banks offers loans to different segments of the society. The loans or credit extensions that it…

Q: William has $1,250 in his savings account and $150 in his bank account. His car payment is $420, and…

A: Current ratio shows the short term liquidity of the company and this is the ratio of current assets…

Q: 3. Financial Planning and Forecasting: Using Regression to Improve Forecasts Regression analysis is…

A: Variables in the question:Sales=$130 million = $130,000,000Increase in sales this…

Q: Your father has promised to give you Rs 2,00,000 in cash on your 30th birthday, today is your 21st…

A: Calculation of annual payment:Formula used:

Q: b-4.5.40%, two-year bond b-il. 5.40%, five-year bond b-il. 10 40%, five-year bond Present Value $…

A: Price of the bond is the PV of all coupons and par value discounted at the required return. We can…

Q: Given the information below, compute the expected return and standard deviation for the two stocks:…

A: The expected return of a stock is calculated as the weighted average of probable returns of a stock…

Q: Maymay & James purchased an item valued at $147,000. They paid $22,050 down and financed the rest at…

A: Loans are paid by the equal annual payments and these payments carry payment for interest and…

Q: Sandhill Company purchased, on January 1, 2025, as an available-for-sale security, $440,000 of the…

A: To prepare an amortization table for the Oak Corporation bonds using the effective-interest method,…

Q: Payments of $4000 each due in four, nine, and eleven months from now are to be settled by two…

A: Present value is the equivalent value today based on time value of money and interest rate of the…

Q: Red Snail Satellite Company has a total asset turnover ratio of 6.00x, net annual sales of $25…

A: Calculation of Total assetsThe debt ratio is

Q: weled Outlook is analyzing a proposed project with expected sales of 9,200 units, ±4 percent. The…

A: Variable cost depends on the volume and increases with increase in volume of production.

Q: We consider three zero-coupon bonds (strips) with the following features: Bond Maturity (years)…

A: 1-year bond current value = $95.422-year bond current value = $94.459-year bond current value =…

Q: Thermal Systems, a company that specializes in odor control for wastewater treatment plants, made…

A: The deposit made now is $100,000Deposit every 6 months is $25,000The interest rate compounded…

Q: Current Attempt in Progress Lisa Anderson wants to invest in four-year bonds that are currently…

A: Current yield of the bond is the rate of return earned on the basis of the market price of the bond…

Q: a) Many years ago, Castles in the Sand Incorporated issued bonds at face value at a yield to…

A: We can determine the price of the bond as the PV of all future coupons and par value discounted at…

Q: On April 1, 1998, Marcus Chapman deposited $4000 into an Individual Retirement Account (IRA) paying…

A: Compound interest is a financial concept that refers to the process of earning interest not only on…

Q: What is the present value of an $800 perpetuity if the interest rate is 8%? If interest rates…

A: Present value of perpetual cash flows is computed by following formula:-PV = wherePV = Present value…

Q: The Spartan Technology Company has a proposed contract with the Digital Systems Company of Michigan.…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: The risk-free rate is 5% and the expected return on the market is 14%. P&G Stock has a beta of 1.2.…

A: Here,Expected Return of the Market (ERM) is 14%Current Return of Market (RM) is 15%Actual Return on…

Q: Stamps Office Supplies recently reported $15,500 of sales, $8,500 of operating costs other than…

A: Sales = s = $15,500Operating Cost other than Depreciation = oc = $8500Depreciation = d = $1700Value…

Q: Beta Co. is considering two projects. Their required rate of return is 8%. Project A $110,000…

A: Here,Project AProjectBInitail Investment $ 110,000.00 $ 80,000.00Annual Cash Flows $ 55,838.00 $…

Q: Elgin Battery Manufacturers had sales of $840,000 in 2021 end their cost of goods sold is 562.800…

A: Sales of Elgin Battery Manufacturer$840,000Cost of Goods Sold$562,800Selling & Administrative…

Q: Question 20 Income Statement for Bearcat Hathaway, 2022 Sales Less Cost of Goods Sold Gross Profit…

A: Addition to retained earnings = Net Income - Dividends paid

Q: On January 19, 2023 the future value of a sum of money will be $69,800. What would be the present…

A: Present value is a current value, which means that if a company or individual receives money today,…

Q: Assume that the operation of your business resulted in sales of $730,000 last year. Year-end…

A: Dollar amount to be received from factor will be calculated as follows:- Dollar amount to be…

Q: A $1,000 Omega Corp. bond has an 8% coupon rate that is paid semiannually. The bond matures in three…

A: Compound = Semiannually = 2Face Value = fv = $1000Coupon Rate = 8/ 2 = 4%Time = nper = 3 * 2 =…

Q: You just got a new part-time job and you need to buy a new car for your job. Suppose you have enough…

A: Variables in the question:PMT=$400Annual interest rate=6%Monthly interest rate=6%/12=0.5%N=5…

Q: A rookie quarterback is negotiating his first NFL contract. His opportunity cost is 10%. He has been…

A: Present Value (PV) is a financial concept used to determine the current worth of a sum of money to…

Q: 6 You have narrowed down your choices for a new car to two opuons. One is relatively cheap with a…

A: Net Present Value is also known as NPV. It is a capital budgeting techniques which help in decision…

Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

You decide to save $75,000 at each year-end for three years. If the interest rate is 8%
compounded quarterly, the future value at the end of year 3 is _______.
A. 243,480
B. 244,049
C. 283,435

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Explanation of the FV of an investment

VIEW

Step 2: Calculation of the FV at the end of Year 3

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
Suppose you are going to invest $11,000 per year for six years. The appropriate interest rate is 9 percent. What is the future value if the payments are made on the last day of the year? What if the payments are made on the first day of the year? a) $82,756.68; $90,204.78 b) $90,204.78; $82,756.68 c) $49,345.10; $53,786.16 d) $53,786.16; $49,345.10
You found out that now you are going to receive payments of $9,000 for the next 11 years. You will receive these payments at the beginning of each year. The annual interest rate will remain constant at 11%. What is the present value of these payments? Round your answer to the nearest whole dollar. a.)$83,704 b.)$49,602 c.)$55,859 d.)$62,003
Suppose that you have the opportunity to receive $24,000 per year for the next 6 years. Over this time period, the APR is 7% per year. Interest is compounded on a monthly basis. How much are you willing to pay for this investment today? Round your answer to the nearest dollar. a. PVA = $113,739 b. PVA = $118,309 c. PVA = $117,309 d. PVA = $118,903
What is the future value in 2 years if you invest $100 at the beginning of each month for 12 months starting today at a rate 3%, compounded semi- annually? a. 1,216.53 b. 1,253.30 c. 1,219.56 d. 1,256.42
If you invest $48500 to earn 7% interest, which of the following compounding approaches would return the lowest amount after one year? Daily. Annually. Monthly. Quarterly.
What's the future value of $1,300 after 5 years if the appropriate interest rate is 6%, compounded monthly? Select one: a. $1,683.36 b. $1,928.86 c. $1,385.27 d. $1,753.51 e. $1,841.18
2. Assume that you can invest to earn a stated annual rate of return of 12 percent, but where interest is compounded semiannually. If you make 20 consecutive semiannual deposits of $500 each, with the first deposit being made today, what will your balance be at the end of Year 20? $57,900.83 $58,988.19 O $52,821.19 O $64,131.50 O $62,527.47
If (P) dollars are invested at the end of each year in an annuity that bears interest at an annual rate (r), the amount in the account will be (A) dollars after (n) years, where: n = log [Ar / P + 1] / log (1 + r) If $ 5,200 is invested each year in an annuity that earns 9% annual interest, when will the account be worth $ 25,000? Round to the nearest tenth.
Suppose you wish to have $11,000 in 13 years. Use the present value formula to find how much you should invest now (in $) at 6% interest compounded semiannually in order to meet your goal. (Round your answer to the nearest cent.) 5157.229