Determine the present worth of annuity consisting of 6 payments of 120,000 each payment are made at the beginning of each year. Money is worth to 15% compounded annually. What problem is all about? A. Ordinary B. Annuity due C. Deferred

Determine the present worth of annuity consisting of 6 payments of 120,000 each payment are made at the beginning of each year. Money is worth to 15% compounded annually. What problem is all about? A. Ordinary B. Annuity due C. Deferred

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A deposit of $495 earns 3% p.a. interest compounded monthly, how much money will be in the bank…

A: Given information, Principal amount (P): $495 Interest rate (r)= 3% Compounding period (m): 12…

Q: a. If an investor invests a sum of Rs. 6000 at an interest rate of 10% compounded quarterly. After 3…

A: a. Given An investor invests a sum of Rs. 6000 at an interest rate of 10% compounded quarterly.…

Q: Alex wishes to have P 800,000.00 available to buy a car in 4 years. How much should he deposit in a…

A: Given that, Present value (P) = 800,000 Rate of interest (r) = 10 or 0.10 Compounded quarterly = 4…

Q: Annabelle loaned a certain amount from ABC bank. She agrees to pay P5000 at the beginning of each…

A: Pay = 5000 time Period = 6 years. interest rate = 10% compounding quater

Q: If you deposit $2,042 today in a savings account that pays 8% interest annually, how much would you…

A: Given: Principal (P) = $2042 Interest rate (R) = 8% annually Time (T) = 5 years

Q: If a bank says that it has a 5% nominal interest rate, but money is compounded monthly in that bank,…

A: An effective annual interest rate is basically the actual return on a savings account or on any…

Q: Grandma wants to give you $420 at the beginning of each month while you are at school for 3 years.…

A: Periodic Payment (PMT) = $420 Time period = 3 years or 36 months n = 36 Interest rate = 4.8%…

Q: - Payday Quik Loan's customers must repay $105.50 one monthtater for each $100 of paycheck advance.…

A: Here, it is given that the present value is $100 and the future value is $105.50 after one month.…

Q: Given an effective interest per annum of 20%, compare the compound amount at the end of 10 years of…

A: An effective interest per annum of 20%, which is =(1+ i/n)^n −1 where: i=Nominal interest rate…

Q: A building is priced at $300, 000. If a down payment of $20, 000 is made and a monthly payment is…

A: Building Price = $300,000 Down payment = $20,000 r = 10% compounded monthly

Q: You are saving for the down payment on a house, so you put $1,000 in an account every 6 months. If…

A: An interest rate is charged on the borrowing money of consumers. It is charged by the lender of the…

Q: If you borrow $12,000 at 20% interest rate for 5 years, what is your ordinary simple interest in…

A: Simple Interest refers to the money that is paid only on principal. Principal is the money that is…

Q: nterest rate... How much do you need to deposit in an account today in order to have $11,000 in…

A: Every commercial bank decides its Annual Percentage Rate (APR) range based on the interest rate set…

Q: 3. Find annual payment to extinguish a debt of P10,000 at interest rate of 12% compounded quarterly?…

A: Value of debt (P) = P10,000The rate of interest is 12% compounded quarterly. Required: The value of…

Q: deposits increasing at a constant rate of 2.7% are made at the end of each year. The first deposit…

A: Initial deposit (P) = 1349Growth rate (g) = 2.7% (converted to decimal: 0.027)Interest rate (i) =…

Q: If you deposit dollar 10000 into a fund paying 6% interest compounded monthly. how much can you…

A: Given the present value in the fund = 10000 Interest rate = 6% Monthly interest rate = 6%/12 = 0.5%…

Q: Compound Interest. Determine the future value of $700 which is invested at 10% interest which is…

A: Introduction: Given the present value = $700 Interest rate = 10% Time period = 8 years

Q: At a certain interest rate compounded semi annually P5000 will amount to P20000 after 10 years. What…

Q: What rate compunded monthly is equivalent to 4.18% converted quarterly In 2 decimal places, input…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: How many years will it take an investment to double if the interest rate is 8.4% compounded at the…

A: The formula for effective interest rate per year is i=1+rmm-1 where m is the reciprocal of the…

Q: 17. What is the effective annual interest rate if the nominal interest rate is 6%, compounded…

A: Formula used - Effective annual interest rate = (1 + (nominal rate / number of compounding periods))…

Q: One borrows a $120,000 for 6 years at 7.24% APR, compounded monthly? a. What is the monthly payment?…

Q: You purchased a car using some cash and borrowing $19,000 (the present value) for 53 months at 12%…

A: Present value of the car=$19000Time=53 monthInterest rate=12% pa

Q: .How long it take money to quadruple if it earns 3% compounded daily 16636 days 16637 days 16867…

A: Let the initial amount is x. It will become 4x in n days. Rate of interest is 3% compounded daily.…

Q: Vince loaned P30,000.00 from a cooperative and promised to pay it back with x times his original…

A: Solving completely

Q: PROBLEM 8. A man wishes his son to receive P300,000 ten years from now. What amount should he invest…

A: Future value (F) = P300,000 Time period (n) = 10 years Interests: i1% = 10% compounded annually…

Q: A series of equal semi-annual payments of $1,500 for 3 years is equivalent to what present amount at…

A: here we calculate the present amount with compound semi-annually so the calculation as follow-

Q: A loan is repaid by making payments of $5000.00 at the end of every six months for fourteen years.…

A: Periodic payment (A) = $5000.00Length of each period = 6 months or half a year.Nominal rate of…

Q: You borrow $ 27965 at 12.25 % interest compounded monthly. If you are unable to make any payments…

A: We use the compound interest formula to calculate the amount due at the end of 5 years. The formula…

Q: Sally purchases a perpetuity immediate with annual payments that pays $4000 toda and Payments…

A: Specifics of annual payment - Increases by 5% annually Paid for 6 years Let the payment in first…

Q: Find the present value of a perpetuity payments of P 600 every 3 months with 6% compounded…

A: here we calculate the present value of perpetuity payment y using the present worth formula and…

Q: A debt of $10,000 with interest at a rate of 20% compounded semiannually is to be amortized by 5…

A: GIVEN A debt of $10,000 with interest at a rate of 20% compounded semiannually is to be amortized…

Q: A series of equal semi-annual payments of $2900 for 3 years is equivalent to what present amount at…

A: Compound interest is computed on both the initial amount of money and the interest that has been…

Q: Pedro made 24 payments of 200,00 each, and all payments are made at the beginning of each year. If…

A: Given that, Annuity = 200,00 n = 24 years r = 18% or 0.18

Q: You buy a car for $27000. You get a loan at 7% interest compounded yearly. You will have 60 equal…

A: total interest refers as the total simple interest on a principal amount at a particular rate of…

Q: 14. Determine the periodic payment for the following deferred annuity. The annuity is an ordinary…

A: Formula: Single payment series future worth: F=P1+in Capital recovery factor: A/P,i,n=i1+in1+in-1

Q: 9. Money is mvested at 10.5% nommal annual rate. Interested is compounded monthly. How much will…

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

Q: What is the nominal value of the interest compounded continuously for a period of 3 years if the…

Q: 6. What interest rate compounded monthly is equivalent to 10% effective rate?

A: 6. Monthly (n)= 12 compounding periods i= 0.1

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

If a person deposit 2000$ in his saving account for 10 years at interest rate of 10%. How much money he will get after 10 years, calculate the value using compound interest formula.
QUESTION 4 A cash flow consists of $100 income at the end of Year 1, $200 at the end of Year 2, $300 at the end of Year 3, and so forth for ten years. What is the equivalent uniform annual cash flow? Use i = 10%.
f you have only $750 on January 1, 2019, what interest rate, compounded annually for3 years, must you earn to have $1,000 on January 1, 2022?
6. Find the FV of $1000invested to earn 10% annually 5 years from now. (Assume this is a single payment not an annuity).
1. What interest rate compounded monthly is equivalent to 10% effective rate?
Find the amount accumulated FV in the given annuity account. HINT [See Quick Example 1 and Example 1.] (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $110 deposited monthly for 20 years at 3% per year in an account containing $12,000 at the start $ Need Help? Master It Read It
3. Ramoncito deposited P15,000.00 today and he deposited the same equal amount each month for the next 9 months. Interest is 7% compounded monthly. a. How much is the value of these 10 equal deposits after 9 months from today? b. If Ramoncito failed to pay the last two monthly payments (8th and 9th), how much should he pay the bank a single amount of 14th month?
You want $12,000 in your IRA in 6 years. Assuming you get 8% compounded quarterly, how much will you need to put in each quarter?
A man save P 150,000 in a fund that earns 14% compounded quarterly. This saving for the future education of his son that worth P 594,000. In how many years will the amount can be withdrawn?
Ramoncito deposited P15,000.00 today and he deposited the same equal amount each month for the next 9 months. Interest is 7% compounded monthly. a. How much is the value of these 10 equal deposits after 9 months from today? b. If Ramoncito failed to pay the last two monthly payments (8th and 9th), how much should he pay the bank a single amount of 14th month? using this fomulas given
Planning for your wedding which would take place 10 years from now, you started to deposit from today a lump sum money every quarter for 4 years at nominal interest of 8% so that you can withdraw $50,000 at your wedding day.a) Sketch the cash flow diagram for the above financial plan.b) Calculate the amount of money that has to be deposited every quarter.