Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Amount desired at End of period: $24,000
Length of Time (years): 4
Annual Rate: 8%
Compounding periods per year: 4
1 number of compounding periods
2. Periodic interest rate-
3. PV factor used-
4. PV of amount desired at end of period-
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- A debt of $52000 with interest at 9.6% compounded quarterly is to be repaid by equal payments at the end of every three months for five years. Calculate the size of the monthly payments,total amount paid and cost of financing. PV =$ I/Y= C/Y= i= n = PMT=$ AMOUNT PAID =$ COST OF FINANCING=$ 2 d.p. 2 d.p. 2 d.p.arrow_forwardFind the future value of a five-year $106,000 investment that pays 9.25 percent and that has the following compounding periods: (Do not round intermediate calculations, round final answers to 2 decimal places, e.g. 15.25.) Value of investment after 5 years a. Quarterly $ b. Monthly $ c. Daily $ d. Continuous $arrow_forwardThe following investment requires table factors for periods beyond the table. Using Table 11-1, create the new table factor, rounded to five places, and calculate the compound amount (in $, rounded to the nearest cent.) Time Nominal Interest New Table Compound Principal Period (years) Rate (%) Compounded Factor Amount $17,000 29 annually $ Need Help? Read Itarrow_forward
- E1 - 27 - What is the future value (FV) after 6 years of the following investments: Payment $200 per month starting month 1. Interest Rate is 9% per year compounded quarterly, need in excelarrow_forwardAn investment accumulates at a force of interest δt = 0.01t / (3 + 0.01t^2) . Find the present value at time t = 0 of $3,900 due at the end of 7.5 year.arrow_forwardUsing Table 11-2 from your text, calculate the present value (principal) and the compound interest given: A = Compound Amount = $1,250 t = Term of Investment = 6 years r = Nominal rate = 6% or 0.06 n = Interest is compounded semiannually = 2arrow_forward
- I calculated the PV value of a $100 payment stream at 1% for 6 years payable at the beginning of the year to be $585.34. Likewise, if I have a balance today of $584.34 in 6 years this balance would be paid off if I deduct $100 at the beginning of each year at 1% interest. (See image capture 1) However I run into issues whe I use two interest rates. Time Payment Rate PV 0 $100 1% 100/(1.01)^0=100 1 $100 1% 100/(1.01)^1=99.01 2 $100 1% 100/(1.01)^2=98.03 3 $100 2% 100/((1.01)^2*(1.02))=96.11 4 $100 2% 100/((1.01)^2*(1.02)^2)=94.22 5 $100 2% 100/((1.01)^2*(1.02)^3)=92.38 The Total PV for this stream is $579.75. So why doesn't the following equation yield zero: Time Payment Rate Balance…arrow_forwardComplete the following using present value. Amount $6,600, Time 10 years, Rate 2%, Compounded semiannually. What is the period used? What is the rate used? What PV factor used? What is the desired end of period amount?arrow_forwardUse the present value table to complete: Note: Round the "PV factor" answer to 4 decimal places. Future Amount Length of Time Desired $ 12,000 12 years Rate Compounded 12% semiannually Table Periods A Rate Used P.V. P.V. Factor Amount C Darrow_forward
- Please calculate the rate used, present value factor used, present value of amount desired at end of period with the present value interest factor chart. Thank you! $6,000 3% 8years compounded semiannually 16 periodsarrow_forwardHow much will $25,000 grow to in three years, assuming an interest rate of 9% compounded annually? (FV of $1. PV of $1. FVA of $1, and PVA of $1). (Use appropriate factor(s) from the tables provided.) Multiple Choice O $44,305 $57,376 $32,376 $31,750arrow_forward
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