MACY’S has a six-year term deposit that will pay 7% per annum compounded quarterly. If $125,000 was invested in this term deposits, calculate the amount he will have in 5years time 2 calculate the EAR

MACY’S has a six-year term deposit that will pay 7% per annum compounded quarterly. If $125,000 was invested in this term deposits, calculate the amount he will have in 5years time 2 calculate the EAR

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 24P

See similar textbooks

Related questions

Q: Deborah can't decide whether she wants to buy and car or lease a car. She is looking at a $48,000…

A: Given, The loan amount is $48,000 rate is 3.95% Term is 3 years

Q: Do you think that the provisions of the new contract will increase morale and decrease turnover? Why…

A: Contract refers to an agreement enforceable by law. It is legal agreement held between two or more…

Q: Tareq is about to make his dream of a house of his own come true. For years he has been saving for…

A: As you have asked a multiple sub part question, we will answer the first three sub parts for you. To…

Q: Question 6. One day, a letter arrives in your mailbox. The letter comes from a trusted attorney…

A: Compound interest. FV = A ( 1 + r)n Where FV = amount avaliable including compound interest after n…

Q: Dr. Barrett wants to purchase a new piece of equipment for his practice. The equipment can be…

A: Earning before tax = Revenue - expense - interest cost - depreciation = $68000 - 32000 - 0 -…

Q: 1. A firm is considering three mutually exclusive expansion projects. Their initial cost is the same…

A: To Find: NPV IRR Payback period

Q: How did they get net cash inflow in this problem? I don't need anything else solved, just need to…

A: Data given: Sale of prototype chips in 2021 = 595 Sale of prototype chips in 2022 = 595+85= 680 Sale…

Q: Why does a bond’s par or face value differ from its market value? Cite your references

A: Bonds par or face value differs from its market value due to time value of money and rate of…

Q: Which of these has the biggest potential risk area? O a. Cash Machines O b. Mobile Banking O c.…

A: A cash machine can be defined as a machine that dispenses cash to the users by inserting a card;…

Q: A firm is worth $50 or $180 with equal probability and is financed with debt that has a face value…

A: The value of a firm would be equivalent to a combination of the present values of debt and equity of…

Q: post-back profitability inde

A: Pay back period refers to a period taken by an investment to cover the initial outlay.

Q: A $67,000 loan is taken out on a boat with the terms 9% APR for 36 months. How much are the monthly…

A: Payment per period can be calculated using PMT function in excel. PMT(rate, nper, pv, [fv],…

Q: You find a bond with 27 years until maturity that has a coupon rate of 9.0 percent and a yield to…

A: Bond price: The yield-to-maturity of a bond and its price are adversely connected. The price of a…

Q: The present value of a sum of money is the amount that must be invested now, at a given rate of…

A: Solution: Amount invested today is called present value and amount with interest at maturity is…

Q: mean by payback . period? What are their significanc:s and drawbacks? Find the payback periods of…

A: 1. The payback period is the period within which the initial investment is recovered. Payback period…

Q: A standard “fixed for floating” interest rate swap contract is effectively a series of call…

A: Interest rate swaps are the derivative contracts where two parties exchange cashflows each other on…

Q: Green Brands, Inc. (GBI) presents its statement of cash flows using the indirect method. The…

A: Answer - Part 1 - Cash flow using the Direct Method - GREEN BRAND INC Statement of Cash Flows…

Q: Listed below are terms associated with the Commercial bank V[Choose] Congress Finding the discount…

A: As per Bartleby guidelines,If a question with multiple sub-parts are posted, first 3 sub-parts will…

Q: John Mojico invested her USD 20,000 in a BPI Time Deposit Account earning 2.8% simple interest for 2…

A: Simple interest is referred as the quick as well as easy method for the calculation of the interest…

Q: Assuming that Bennett uses the straight-line method of amortization, interest expense for Year 2 is…

A: Bond amortization refers to a schedule which is prepared to shows the coupon payments, amount paid…

Q: There are two projects under consideration by the Rainbow factory. Each of the projects wil require…

A: Net present value is the difference between Present Value of cash Inflows and Present Value of cash…

Q: 8. Suppose a certain bond sold a volume of 2, 375, 000. If the bonds sold for $824.99, calculate the…

A: Last price of the price of the bond is expressed as a percentage of Face value = (100 * Price)/Face…

Q: Christina is deciding whether or not to enroll in a one-year academic program at the start of 2023…

A: The internal rate of return is the rate which equates the present value of cash inflows from a…

Q: Subah's current stock price is $36 and its D0= $2.4. The company’s required rate of return is 12%…

A: Stock price = D0*(1+growth rate)/(required return - growth rate) where D0 = Current dividend 36 =…

Q: Consider the binomial model for an American call and put on a stock that pays no dividends. The…

A: European call option used to give an owner the right for acquiring an underlying security at an…

Q: Explain the difference between the unbiased expectations theory of the term structure of interest…

A: There are different theories that describe how the interest rates are set.

Q: B. Patrimonial loss for loss of financial support.

A: Insurance refers to a contract between the insurance company and insurer in which a fixed amount of…

Q: Black Corporation has forecasted sales in 2020 as follows: Jan-P120,000 Feb-P160,000 Mar-P180,000…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: Find the future value of the given annuity (Round your answer to the nearest cent.) Ordinary…

A: Solution:- When an equal amount is paid each period at end of the period, it is called ordinary…

Q: 8. Suppose a certain bond sold a volume of 2, 375, 000. If the bonds sold for $824.99, calculate the…

A: Given: Volume sold = 2,375,000 Bond price = $824.99 Coupon = 3.961

Q: Consider a bond with a coupon of 4.6 percent, five years to maturity, and a current price of…

A: Here, Increase in yield = 2% To Find: Part A. New price of the bond by using duration =? Part B.…

Q: When estimating the loss reserves in car insurance, the ________________ is used to assign a loss…

A: Insurance companies provide insurance for vehicles and personal based on that premium are charged…

Q: Consider BOND AAA Coupon rate: 9,4% per year Yield to maturity: 10,6% per year Settlement date: 16…

A: Accrued interest are the interest which is calculated in between and is added to the bond price…

Q: ABC Company is issuing an issue of bonds with a 10-year m aturity, a RM1,000 par value, a 12 percent…

A: Par value of the bond = RM1,000 Coupon rate = 0.12 Semiannual coupon amount (D) = RM1,000 * 0.12 / 2…

Q: Please explain everything without any plagiarism do in your words will give you many upvotes

A: In capital budgeting we use several different tools to determine the financial feasibility of a…

Q: A student needs P4000 per year for 4 years to attend college. Her father invested P5000 in a 7%…

A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Nicole is planning for retirement. she deposits $825 at the end of each year in an ordinary annuty…

A: Data given: Money deposited at the end of each year = $825 Interest rate=4% compounded annually.

Q: $230.16

A: Payment per period refers to the amount which is to be paid at equal intervals for a certain…

Q: Good Credit is between O 680-700 O 620-800 O 650-700

A: Credit score determines the credit worthiness of customers. A good credit scores enables the…

Q: common stock of Denis and Denis Research Inc. trades for $60 per share. Investors expect the company…

A: Current stock price (P0) = $60 Next dividend (D1) = $3.90 Required rate of return (r) = 10% Growth…

Q: What is the future equivalent of 10,000 per year that flows continously for 8.5 years if the nominal…

A: The following information has been provided in the question: Present value= 10000 per year Time =8.5…

Q: Current Price $100 Expected Price in 1 year Expected Dividend T-year T Bond yield $107.98 Beta 2.0…

A: Holding period return is referred to the total return received from holding an asset or portfolio of…

Q: What is her Monthly Payment for Student Loans at the State University?

A: Loan Payments: These are payments made to amortize the loan amount by the borrower to the lender.…

Q: Suppose that the price of corn is risky, with a beta of 0.5. The monthly storage cost is $0.04 per…

A: The following information has been provided in the question: Beta=0.5 Monthly storage cost=$0.04 per…

Q: Bond Info: Coupon Rate 11.875% Quoted Yield 3.000% Maturity Date May 29, 2023 Frequency 2 Tax Rate…

A: Bonds carry the payment of interest each period and these are based on stipulated rate mentioned on…

Q: On 16th may 2021 you purchased some shares at a price of $78 per dollar a share and a year later you…

A: Purchase price (P) = $78 Selling price (S) = $92 Dividend (D) = $2.5

Q: bond with a coupon rate of 10 percent sells at a yield to maturi ercent. If the bond matures in 12…

A: Macaulay duration show changes in prices of bonds with changes in interest rate in the market.…

Q: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2.…

A: In finance we use several financial ratios. These ratios helps us to determine the financial health…

Q: a coupon of 6.6 percent, a YTM of 8.35 percent, and also has 15 years to maturity. If interest rates…

A: Bond Price: It is computed by discounting all the coupon payments and the par value of the bond by…

Q: Why does the market value differ from its par value when the coupon interest rate does not equal the…

A: Par Value is the denominated value of bond which is used for coupon calculation whereas market price…

Question

MACY’S has a six-year term deposit that will pay 7% per annum compounded quarterly. If $125,000 was invested in this term deposits,

calculate the amount he will have in 5years time

2 calculate the EAR

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1: Given Information:

VIEW

Step 2: Calculation:

VIEW

Step 3: Excel Workings:

VIEW

Step by step

Solved in 3 steps with 2 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 plan to make 15 annual deposits in a saving account that pays 6% interest compounded annually. If the first deposit of $1,200 is made al the end of the first year and each subsequent deposit is $400 more than the previous one, the value of the account at the end of 15 years will be nearly:(a) $87,021(b)$92,242(c) $97,777(d) $83,104
Kyle borrowed P100,000 to be paid in 10 years, and established a sinkingfund to provide for the payment of this obligation. The deposits with thefund will be made at the end of every six months. If money is worth 8%compounded semi-annually, what should be the amount of each deposit.
A depositor puts $30,000 in a savings account that pays 4% interest, compounded quarterly. Equal annual withdrawals are to be made from the account, beginning one year from now and continuing forever. What is the maximum annual withdrawal? Please show me every step
You deposit $4000 in an account that pays 6% interest compounded semiannually. After 3 years, the interest rate is increased to 6.28% compounded quarterly. What will be the value of the account after a total of 6 years?
A person wants to deposit $10,000 per year for 6 years. If interest is earned at the rate of 10 percent per year, compute the amount to which the deposits will grow by the end of the 6 years if: a . Deposit of $10,000 are made at the end of each year with interest compounded annually. b. Deposit of $5,000 are made at the end of each 6-months period with interest compounded semiannually.
suppose that $47,700 is invested in certificate of deposit for 3 years at 6.2% annual interest to be compounded daily. how much interest will this investment earn?
You deposit $3000 in an account that pays 88% interest compounded semiannually. After 33 years, the interest rate is increased to 8.408.40% compounded quarterly. What will be the value of the account after a total of 66 years? The value of the account will be $.
A loan of $10200 is to be amortized with quarterly payments over five years. The interest on the loan is 7.5% per year, paid on the unpaid balance. What is the payment to pay off the loan?
A loan of $10200 is to be amortized with quarterly payments over five years. The interest on the loan is 7.5% per year, paid on the unpaid balance. What is the portion paid towards interest of the 17th payment?
You plan to accumulate R450,000 over a period of 12 years by making equal annual deposits in an account that pays an annual interest rate of 9% (assume all payments will occur at the beginning of each year). What amount must you deposit each year to reach your goal?
A financial institution is offering a six-year term deposit that will pay 7% per annum compounded quarterly. If $125,000 was invested in this term deposits, How much money will you have at the end of five years? What is the EAR?
A loan of $10200 is to be amortized with quarterly payments over five years. The interest on the loan is 7.5% per year, paid on the unpaid balance. What is the payoff amount (remaining balance) after the 10th payment?