Abdullah want to choose a better option for making investment, help him to decide which the better option is by calculating time value of money for the following: a) An investment of OMR. 50000 in a Bond which pays 6.75% interest for 15 years. b) A Bank deposit of OMR. 50000 which pays 6.75% interest for 15 years but compounding is done quarterly. c) Which of the two options should Abdullah accept? Why d) Assume yourself in place of Abdullah and share which investment would you prefer from the available investment opportunities in Oman?

Q: Chester hopes to earn $1200 in interest in 2.5years time from $60,000 that he has available to…

A: The annual interest rate that is charged by the lenders or at which the investors earn additional…

Q: What is the present value of the annuity if the prevailing interest rate is 10% per year?

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Abdullah is looking to invest for the next three years. He is looking to invest OMR 7500 today in a…

A: Given: Present value = OMR 7,500 Interest annually = 5.75% Years = 3

Q: Jordan wants to double his money in 9 years in an investment fund. What quarterly compounding…

A: Data given: FV=2 * PV N=9 years Compounding=Quarterly   Required: Quarterly compounding interest…

Q: Practice Exercise 1: Abdullah want to choose a better option for making investment, help him to…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Suppose that your friend has a farm in 2019 and wants to make an investment 150,000 in 2030 for all…

A: Future Investment = 150,000 Time duration = 2030-2019 = 11 years

Q: Marian Plunket owns her own business and is considering an investment. If she undertakes the…

A: NPV is the tool used by investors responsible for evaluating investment proposals where net benefits…

Q: For this, he needs to borrow $4M from a local bank. The bank’s financing terms allows Hanifa to…

A: This is a problem involving discounting loan. This this type of loan, the bank collects the interest…

Q: Justine is thinking about purchasing an investment from RCBC Capital. If she buys the investment,…

A: Receipts = 1000 every quarter for 2 years Beginning of period payments Time Period = 2 years * 4 = 8…

Q: hat do you think the future worth of her investment will be?  b. How much interest will she earn?

A: Interest: Interest is the income generated from investing an amount in a bank or any other financial…

Q: Question 1 What would be the better outcome, renting or buying and by how much? (Show your work and…

A: Pierre is deciding on whether he should buy a house or rent it. If rented the expense will be $1500…

Q: You have been offered an investment in Brian, Jesse, and Lisa. Each investment pays $1,000 at the…

A: payout at the end of 3rd year 1000 payout ever year 80

Q: A 65 year-old man is retiring and can take either $500,000 in cash or an ordinary annuity that…

A: Solution Concept Time value of money As per the concept of time value of money , the value of amount…

Q: Marian Plunket owns her own business and is considering an investment. If she undertakes the…

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

Q: Cheyenne has the option to buy two different annuities. The first starts in six years and pays…

A: To determine which annuity (or annuities) Cheyenne should purchase and the value she will realize…

Q: r another 4 years. At the end of the 7th year, Jenna expects to sell the investment for $25,000. If…

A: The given problem can be solved using NPV function in excel.

Q: You are thinking about buying a real estate property.  If you buy the property, you think you will…

A: The most that you should be willing to pay for the property is [selling price today*1/(1+r%)^t]

Q: A newly wedded couple is planning to buy a two bedroom apartment in Windhoek for N$280000. He is…

A: The objective of the question is to calculate the total amount to be paid to the bank, the monthly…

Q: Samy would like to buy a house with cash ten (10) years from now. The house is currently selling at…

A: Annuity means a series of finite number of payments which are the same in size and made in equal…

Q: Ahmed is offered OMR.  5000 four years from now or OMR.  4000 in cash today.  Suggest Ahmed as to…

A: Present Value(PV) is computed by discounting future amount using discount rate that is yet to…

Q: An individual is investing in a market where spot rates and forward rates apply. In this market, if…

A: Bonds are the debt securities which are issued by corporations or the government to arrange the…

Q: Fatema wants to invest an amount of OMR.  2000 every year to go on vacations with her husband at the…

A: Annual Amount invested =OMR 2000 Years (n) = 5 Interest Rate(r1) = 7.85% = 0.0785 Interest rate(r2)…

Q: Mrs. Seema visited financial consultant, who suggested following two options available for 8 years…

A: The alternative that yields the higher return should be selected. Compute the future value in both…

Q: 2. Marjorie Yan recently retired from work and wants to use a portion of her retirement money for…

A: Marjorie Yan has retired and wanted to invest the funds here the bond fund gives return of 6% and…

Q: Benjamin knows that he will be receiving $100,311 to settle an insurance claim, but he will not…

A: Simple discount refers to the method of calculation of the amount received and interest paid where…

Q: Salvatore has the opportunity to invest in a scheme which will pay $7,500 at the end of each of the…

A: Net Present Value:Net present value (NPV) is the difference between the present value of inflows of…

Q: John wants to borrow 75,800 from a bank payable in 3 years and 9 months. if the bank charges 9.5%…

A: Note:  It is assumed that the loan is given on a simple interest rate basis. Simple Interest refers…

Q: ne of the following options and has asked for your help in terms of a payout from his trust fund: he…

A: Option 1 Lump sum payment = 2,150,000   Option 2 Annual Payment = 225,000 N = 14 years   Instance 1…

Q: Alani plans to invest $500 into an IRA at the beginning of every month for the next 20 years. She…

A: An annuity refers to a stream of cash flows that occurs on a periodic basis and the cash flow…

Q: 1) In a few short years, you will graduate and enter the workforce. Let us suppose that you and a…

A:

Q: You have just completed your bachelor’s degree in business and applied for a job with a local bank.…

A: Hi, since you have posted multiple questions, I will answer only the first one as per our…

Q: to pay his son’s university tuition fees for 4 years starting 18 years from now. The current annual…

A: There is need of planning for the future cost of education because compounding increase value of…

Q: Ronald has an investment opportunity that promises to pay him $55,000 in three years. He could earn…

A: Given: Future value = $55,000 Years = 3 Interest rate = 6%

Q: Angel would like to start investing his money. He has $10,000 that he hopes to use as a down payment…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: Practice Exercise 1: Abdullah want to choose a better option for making investment, help him to…

A: Time value of money is the idea that money loses value over time. Therefore, to retain its value or…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.