Solve each of the following questions using both pricing formulas and Excel. 1. If you wish to accumulate $150,000 in 10 years, how much must you deposit today in a bank account that pays an annual interest rate of 12%?
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A: (1) (a.) FV =PV*(1+r)^n =4000*(1+8%)^12 =10072.68 (b.) If rate =8% with monthly compounding FV…
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A: given, monthly compounding N =10 x 12 = 120I =3%12PV =0PMT =200 FV = need to find
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A: given, rate = 3% no of years= 45 FV= 300,000
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A: Future Value = Present Value(1+r)n Future value is the present value compounded at interest rate
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A: Future value formula Used for Calculation: FV= PV(1+r)^n PV = present value = 7500 r= rate of…
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A: Deposit=$8000Interest rate=4%Number of years=5
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Q: Suppose you receive $100 at the end of each year for the next three years. a. If the interest rate…
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A: Formula: Present value = Future value / ( 1 + r )N R = Rate of interest N = Time period.
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A: The deposit required to be made today can be calculated as the present value
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A:
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A: Future value = p/r * ((1+r)n - 1) P = 8000 r = 12% N = 10 Future value = 140,389.88
Q: cashflow diagram.
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Q: If you deposit $3,000 in a bank account that pays 12% interest annually, how much will be in your…
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Q: !
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Solve each of the following questions using both pricing formulas and Excel.
1. If you wish to accumulate $150,000 in 10 years, how much must you deposit today in a bank account that pays an annual interest rate of 12%?
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- 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?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.Assume that you have $10,000,000 in your bank account. You wish to withdraw $400,000 per year, at the end of each year, for the next 5 years, after which you wish to have $11,000,000 in the bank. What is the balance in your account after the 2nd year (after the withdrawal)? Hint: you will need first to solve for rate in Excel given all other parameters. Watch signs. Select one: a. $10,366,644 b. $10,600,000 c. $9,600,000 d. $10,488,912
- For the following economic calculations, write the factors (multipliers) that should be used,in (i) using the parameter values, and in (ii) calculate the result by showing your computations. Write the results you find in the spaces left. (Use factors for your calculations.)EXAMPLE: If you deposit $ 100 to a bank account that earns 8% annual interest, how much money will you have in this account after five years?(i)(F/P, 8%, 5) (ii)146.93100 * (F/P, 8%, 5) = 100 * 1.4693 = 146.93 TLa. You plan to take a credit with $1500 installment size per year with an annual interest rate of 8% over six years from a bank. What is the amount of your current credit?(i) (ii)b. A bank is required to deposit money for four years with an interest rate 10%. The money deposited at the end of the first year is 6000 TL and the amount of money deposited in the next three years will be reduced by 500 TL every year. How much money will be in the bank at the end of the fourth year?(i) (ii)Please provide the steps to solving this problem using a financial calculator: You just opened a brokerage account, depositing $3,500. You expect the account to earn an interest rate of 9.652%. You also plan on depositing $4,500 at the end of years 5 through 10. What will be the value of the account at the end of 20 years, assuming you earn your expected rate of return?You open an account where you deposit $500 today. Further, you deposit $800 at the beginning of next year, withdraw $250 at the beginning of year two and deposit $450 at the beginning of year 3. The return for year 1 is 6%, for year 2 it is -8%, for year 3 it is 4.5% and for year 4 it is -2%. What is your dollar-weighted or money-weighted return (in percent) for the four-year period? Answer to two decimals. O -1.45 -6.95 -11.92
- Suppose you will need $43,000 in 21 years. If your bank compounds interest at an annual rate of 4%, how much will you need to deposit into your account 2 year(s) from now to reach your goal? Enter your answer rounded to two decimal places. NumberSuppose you want to have $400,000 for retirement in 10 years. Your account earns 9% interest. Feel free to use the Online Basic Financial Calculator a) How much would you need to deposit in the account each month? S b) How much interest will you earn? S1. You deposit GHS10,000 today into an account paying 6% annual interest and leave it on deposit for exactly eight years. Required: How much will be the amount in the account at the end of eight years if interest is compounded annually? 2. Imagine you are a professional personal finance planner. One of your clients ask you the following question. Use time value of money technique to develop appropriate responses in each question. I borrowed GHS75,000, am required to repay it in six equal (annual) end of year instalments of GHS3,344 and want to know what interest rate I am paying.
- Please indicate what you entered into your calculator to solve these problems. 1. You graduated with $28,000 in school loans. You will make annual payments of $4,000 at the beginning of each year for the next 10 years. What annual rate of interest are you being charged on your school loans? 2. You bought equipment for $23,000 and agreed to make monthly payments at the end of each quarter for 5 years. Assuming you are being charged 9% interest compounded QUARTERLY, how much will your QUARTERLY payments be? 3. You currently have $750,000 in your building fund. If you start depositing an additional $20,000 per year into this account at the beginning of each year, how much will be in the account after 6 years assuming 5.5% interest compounded annually? 4. You want to start saving for a new car and have decided to put S$90 per month at the beginning of each month into an account which earns 6% compounded monthly. You would like to be able to buy a car for $25,000. (a) How many deposits will…Use Excel to answer the following questions. 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? 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%? 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? 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?There is an investor stating they will pay out $84,000 at the end of 4 years. In order to invest into the opportunity, you'll need to make a deposit of $10,000 to thier indicated bank account. What is the average annaul return rate. Use excel functions to indicate your steps.