A local bank advertises the following deal: "Pay us $100 at the end of each year for 12years and then we will pay you (or your beneficiaries) $100 at the end of each yearforever." Calculate the present value of your payments to the bank if the interest rate is4.75%. Note: Do not round intermediate c What is the present value of a $100perpetuity deferred for 12 years if the interest rate is 4.75% ? is this a good deal?

A deferred perpetuity involves a stream of regular payments that starts at a certain point in the…

Answered: A local bank advertises the following…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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If you are expecting to get OMR 10240 at the end of 3 years. Calculate its present value if the interest rate is 9.42% and is computed quarterly. Select one: a. 3344.46 b. 7744.46 c. 6644.46 d. 2244.46 If you deposit OMR 27177 in your account in a bank. Suppose the bank pays 12% compound interest quarterly. Calculate value of your money in 4 years Select one: a. 166607.80 b. 43611.11 c. 16935.81 d. 42749.42 e. All the given choices in this question are not correct The company has made an investment in government bonds. The bonds will generate an interest income of OMR 20661 each year for 6 years. The interest rate is 12% annually. Compute present value of the stream of interest income for 6 years. Select one: a. 64284.79 b. All the given choices in this question are not correct c. 105606.79 d. 84945.79 e. 5025.29 Abdullah deposits OMR 23422 at the end of every year for 4 years and the deposit earns a compound interest of 3% per annum. Calculate the amount at the end of…
just say it option. Question 1) You took 100.000 TL car loan from a bank. You will repay the loan to the bank in 4 years with a compound interest of 12% per month in 48 equal installments. In this case, how much of the first installment payment is interest and how much is the principal payment? Please choose one: А. 1630, 1000 В. 1000, 1630 С. 1430, 1200 D. 1200, 1430 Question2) If payments are made every 6 months, calculate the interest for the following situations? 9% annual compounded quarterly interest Quarter 3%, quarterly compounded interest 8.8% per annum, quarterly compounded interest Please choose one: А. 9.15%, 3.09%, 9.06% B. 9.55%, 3.09%, 8.8% C. 4.55%, 6.099%, 4.48% D. 9.45%, 6.09, 9.16% E. 9.1%, 12.18%, 8.96
May I ask for an explanation and solution to the question for a better understanding. Thank you! 15. You expect to receive P1,000 at the END of each of the next 3 years. You will deposit these payments into an account which pays 10 percent, compounded semiannually. What is the future value of these payments, that is, the value at the end of the third year? a. P1,331.00 b. P1,340.10 c. P3,318.01 d. P1,157.63
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Lorena's Cart took out a loan from the bank today for $245,800.00. The loan requires Lorena's Cart to make a special payment of $82,400.00 to the bank in 3 years and also make regular, fixed payments of X to the bank each year forever. The interest rate on the loan is 9.60 percent per year and the first regular, fixed annual payment of X will be made to the bank in 1 year. What is X, the amount of the regular, fixed annual payment? O $15,686.40 (plus or minus 3 dollars) O $62,588.64 (plus or minus 3 dollars) O $17,588.29 (plus or minus 3 dollars) O $23,596.80 (plus or minus 3 dollars) O none of the answers are within 3 dollars of the correct answer
A local bank advertises the following deal: "Pay us $100 at the end of each year for 10 years and then we will pay you (or your beneficiaries) $100 at the end of each year forever." a. Calculate the present value of your payments to the bank if the interest rate is 6%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the present value of a $100 perpetuity deferred for 10 years if the interest rate is 6%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
An investor wants to save money to purchase real estate. He deposits $550 at the end of each year in an ordinary annuity that pays 4% interest, compounded annually. Answer each part. Do not round any intermediate computations nor answers. If necessary, refer to the list of financial formulas. (a) Find the total value of the annuity at the end of the 1 year. st 24 (b) Find the total value of the annuity at the end of the 2 nd year. (c) Find the total value of the annuity at the end of the 3 rd year.
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A local bank advertises the following deal: "Pay us $100 at the end of each year for 10 years and then we will pay you (or your beneficiaries) $100 at the end of each year forever." a. Calculate the present value of your payments to the bank if the interest rate is 6%. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Present value b. What is the present value of a $100 perpetuity deferred for 10 years if the interest rate is 6%? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Present value c. Is this a good deal? Yes No
A bank pays 6% interest, compounded semiannually. Use the appropriate formula to find how much should be deposited (in $) now to yield an annuity payment of $300 at the beginning of each six months, for 12 years. (Round your answer to the nearest cent.)

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