a. Determine the interest rate if the money was compounded continuously. b. Determine the effective interest rate. c. Determine the Present Worth Factor.
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- You have been depositing money into an account yearly based on the following investment amounts, rates and times. What is the value of that Investment account at the end of that period?A certain some of money P draws interest compounded continuously. If a certain time there are Po dollars in the account, determine the time when the financial attains the value of 2Po dollars if the annual interest rate at 2%The Future value of a Present amount of money (compounded annually) after 1 year can be determined by: multiplying the Present amount by (1+interest rate) dividing the Present amount by (1+interest rate) adding the interest rate to the Present amount subtracting the interest rate from the Present amount
- For each of the following situations involving annulties, solve for the unknown. Assume that interest is compounded annually and that all annulty amounts are received at the end of each period. (/= Interest rate, and n = number of years) Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. 2. 3. 4. 5. Present Value 248, 196 442,750 650,000 175,000 Annuity Amount $ 5,000 80,000 60,000 155,040 8% 11% 10% n = 5 4 10 43. Calculate the total present value of the following three cash flows: $98 obtained one year from today, $28 obtained two years from today, and $26 obtained three years from today. Use 10.2% as the interest rate. Answer to the nearest centFor each of the following situations involving annuities, solve for the unknown. Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (/= interest rate, and n= number of years) Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) 1. $ 2 3 4. 15 Present Value Answer is complete but not entirely correct. Annuity Amount 2.200 145,000 190,000 72.523 45,787 8,784 558,865 480,945 520,000 240,000 8% 1.0% 9% 2.5% 10% n= 5 4 30 8 4
- To calculate the effective rate of return on an investment, the total compound interest earned in 1 year is divided by the _____.Increasing the number of periods will increase all of the following except Select one: a. the present value of $1. b. the future value of an annuity. c. the future value of $1.3. DETAILS ZILLDIFFEQMODAP11 3.1.010. (b) In how many years will the initial sum deposited have doubled? (Round your answer to the nearest year.) years Need Help? When interest is compounded continuously, the amount of money increases at a rate proportional to the amount S present at time t, that is, ds/dt = rs, where r is the annual rate of interest. (a) Find the amount of money accrued at the end of 7 years when $3000 is deposited in a savings account drawing 5 % annual interest compounded continuously. (Round your answer to the nearest cent.) $ (c) Use a calculator to compare the amount obtained in part (a) with the amount S = 3000 1 + S = $ Read It 7(4) 3000(1+1(0.0575)) (*) MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER that is accrued when interest is compounded quarterly. (Round your answer to the nearest cent.)
- (a) Find the present and future value of an income stream of $6000 per year for a period of 10 years if the interest rate, compounded continuously, is 2%. Round your answers to two decimal places. Present value = $ Future value $ (b) How much of the future value is from the income stream? How much is from interest? Round your answers to two decimal places. The amount from the income stream is $ The amount from the interest is $4. What rate of interest, compounded annually, willresult in the receipt of $15938.48 if $10000 is investedfor 8 years?include a cash flowAverage 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 %