Find the present value of OMR7, 000 to be receive one year from now, assuming a 3 percent annual discount interest rate. Also calculate the present value if the OMR7, 000 is received after two years.

Present value is the current value of a future stream of income or cash flows. It is very easy and…

Answered: Find the present value of OMR7, 000 to…

Find the present value of OMR7, 000 to be receive one year from now, assuming a 3 percent annual discount interest rate.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

See similar textbooks

Related questions

Q: An investment is expected to result in equal payments of $3160.00 at the end of each of the next 5…

A: The question is based on the application of the time value of money for annuity payments. Annuity…

Q: given the situation , choose the correct formula to solve the problem: find the future value of an…

A: Future value of annuity = P * [ (1+r)^n - 1 ] /r Where P = Annuity amount i.e. $5000 r = rate of…

Q: What is the present value of an annuity due that promises $20,000 per year for 20 years if the…

A: The current value of the cash flow or stream of cash flow after discounting is termed as the present…

Q: What's the present value of $15,500 discounted back 5 years if the appropriate interest rate is…

A: Present Value = Future Value/(1 + r)^t Where, Here, Future Value = $15,500 n = 5*2 = 10 periods r =…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: To calculate the present value of annuity we will use the below formula Present value =…

Q: Find the future value of a 6-year annuity due with payments of $4,300 and an annually compounded…

A: An annuity is a contract that pays a periodic sum for a predetermined period for a lump-sum amount…

Q: What is the present value of $700 to be received in two equal installments ($350 each), two years…

A: 1. we can calculate the present value of the investments as:…

Q: What is the present value of 10,000 TL to be received at the end of 3 years if the discount

A: Present value is given future value divided by discount rate times number of years.

Q: Find the present value and future value in the given situation: Monthly payments of 3000 for 4…

A: Present value is the sum of money that must be invested in order to achieve a specific future goal.…

Q: What is the future value of $650 deposited for one year earning an 10 percent interest rate…

A: In the given question we require to calculate the future value of $650 deposited today for one year…

Q: Find the future value of the following ordinary annuities. Payments are made and interest is…

A: Given, The payments $4000 Interest rate is 10% Term is 20 years

Q: Find the future value of a 15-year annuity due with payments of $2,700 and an annual compound…

A: To Find: Future Value

Q: What is the present value of $2,100 to be received 14 years from now assuming a discount rate of…

A: Given information: Future value of amount is $2,100 Number of years is 14 Discount rate is 3.7% for…

Q: present

A: Formula to calculate Present value: PV = FV/(1+r)^n Where PV is the present value, FV is the fututre…

Q: What is the present discounted value of $400 to be received one year from now plus $500 to be…

A: Present value = amount to be received in future/(1+r)^n where r is the discount rate (or 4%) and n…

Q: What will be the present value, if $6,800 is discounted back 4 years at an interest rate of 4%…

A: Interest rate=4%Period=4yearsFuture value=$6800

Q: What is the present value of $2,300 received 5 years from now using a 3% interest or discount rate,…

A: In the given question we need to compute the present value from below details: Future value = $2300…

Q: n annuity pays $1000 per year for 10 years. Inflation is 6 percent per year. ) If the real MARR is 8…

A: Real interest rate is reduced due to inflation but the actual rate is much larger.

Q: Suppose an annuity pays $2000 at the end of each 3 month period for 3.5 years at an interest rate of…

A: given, A = $2000 n = 3.5 r = 4% pa but it is compounded quarterly therefore, frequency of…

Q: a. What is the present value of 15 annual payments of $100, with the first payment one year from…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: What is the present value of $10,000 to be received two years from today assuming an annual interest…

A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given

A: Present Value of Annuity: It represents the present worth of the future annuity periodic payments…

Q: What will be the present value, if $5,400 is discounted back 4 years at an interest rate of 3%…

A: In the given question we require to calculate the Present value using following details: Amount =…

Q: 1. If you receive $29 each quarter for 19 years and the discount rate is 0.05, what is the present…

A: In this Question we are required to compute the Present Value of Cash flows received every quarter…

Q: Find the present value of the following annuities: 1. 100 at time 1 and increasing by 100 annually…

A: 1. Computation of present value of annuity Year…

Q: Suppose you were to receive a perpetual annual payment (perpetuity) of €640 per year. In the…

A: Present Value: It represents the present worth of the future cash flow stream and is computed by…

Q: Suppose you wish to have $15,000 in 6 years. Use the present value formula to find how much you…

A: Present value method is used to evaluate the different level of investment projects. With the help…

Q: What is the percent value of $2,725 per year, at a discount rate of 10%, if the first payment is…

A: The time value of money implies that the cash in hand at present has a higher value than the cash…

Q: A man bought an eqpt costing P500k payable in 20 semi annual payments with i = 12% , determine each…

A: Calculate the periodic payment using the present value of annuity. For payment made after 1 year the…

Q: You are given the following term structure of spot interest rates: r1 = 5.00%, r2 = 6.50%. A…

Q: The following payments are to be received and Using an annual effective interest rate of 2% (a) with…

A: Time value money is the concept a sum money is worth more now, than it would be on a future date.

Q: A 20-year annuity X has annual payments of $10,000 at the beginning of each year for 10 years, then…

A: A series of payment made at equal interval is called Annuity.

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. $2,300 per…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: If the present value of $400 paid one year from now is $320, what is the one-year interest rate?…

Q: Determine the present value of a 3 year CSB with an interest rate of 3.9%, compounding…

A: present value=future value1+rmm×n r=rate of interest m=frequency of compounding n=number of years

Q: What is the present value of the following annuities? 70 a year for 3 -years discounted back to the…

A: Annuity referes to the payments made at regular interval. It could be ordinary annuity when payments…

Q: What is the present value of $25,000 to be recieved in 15 years at a (a) 6.2 percent rate and (b)…

A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…

Q: Determine the discount rate assuming the PV of $1080 at the end of 1-year is $980? $9,800 is…

A: Future Value = Present Value * (1+r)^n Where. r = rate of interest n = no. of years

Q: What is the present value of an annual payment of $9,500 discounted back 8 years at an annual rate…

A: given, A=$9500 r=3% n=8

Q: If the present value of $444 to be paid at the end of one year is $400, what is the one-year…

A: Discounting is a technique to compute the present value (PV) of future cashflow by considering…

Q: You are calculating the present value of $1,000 that you will receive five years from now.Which…

A: Given case is: You are calculating the present value of $1,000 that you will receive five years from…

Q: What is the future value at the end of 4 years if you receive a discount rate of 12% and receive KRW…

A: Annual amount received (A) = KRW 1,000,000 Discount rate (i) = 12% Number of annual receipts (n) = 4

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given

A: Present value (PV) is the value of future’s money at today’s date. PV of annuity refers to the…

Q: What is the present value of an annuity due of 2,000 per year for 15 years discounted back tobthe…

A: In present value of annuity due, payment is due at the beginning of the year. We need to use formula…

Q: A perpetuity will pay $1000 per year, starting five years after the perpetuity is purchased. What is…

A: The question is based on the concept of perpetuity payment and concept of time value of money.Future…

Q: What is the value today of receiving $5,000 at the end of each year for the next two years, assuming…

A: SOLUTION : GIVEN, Annual payment = $5,000 Interest rate = 10% = 0.10 Number of years = 2 years…

Concept explainers

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.

Question

Find the present value of OMR7, 000 to be receive one year from now, assuming a 3 percent annual discount interest rate. Also calculate the present value if the OMR7, 000 is received after two years.

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

Introduction

VIEW

Answer and calculations

VIEW

Step by step

Solved in 2 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, finance and related others by exploring similar questions and additional content below.

Similar questions

You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
You may purchase an annuity that will pay you 300000 in income per year starting one year from now and continuing for a total 22 years, or 22 payments. Assuming an annual risk-free interest rate of 4%, what is a fair price for this annuity?
Suppose that you will receive annual payments of $16,500 for a period of 10 years. The first payment will be made 6 years from now. If the interest rate is 7%, what is the present value of this stream of payments?
Find the future and present value of a 5 year GHC 1,000.00 annuity if the rate of interest is 12% and the first monthly payment is made now.
You may purchase an annuity that will pay you ¥300,000 in income per year starting one year from now and continuing for a total of 22 years, or 22 payments. Assuming an annual risk-free interest rate of 4%. What is a fair price for this annuity? Round your answer to the nearest yen
Suppose you are going to receive $5,000 per year for 8 years. The appropriate interest rate is 10 percent. What is the present value of the payments if they are in the form of an ordinary, a. anhuity? b. What is the present value if the payments are an annuity due?
Assume you will be paid $100 next year and every year after, and the interest rate is 2%. Calculate the present value of this infinite future payment of $100
Suppose you are going to receive $10,000 per year for 5 years. The appropriate interest rate is 11%. What is the present value of the payments if they are in the form of an ordinary annuity?
What is the present value of a perpetuity that pays 1,000 per year beginning 1 year from now if the appropriate interest rate is 5%?
Suppose that an annuity will provide for 20 annual payments of 1240 dollars, with the first payment coming 9 years from now. If the nominal rate of interest is 8.8 percent convertible monthly, what is the present value of the annuity? Answer= dollars
Find the present values of these annuities due.a. What is the present value of $4,000 per month for one year with an annual interest rate of 4.8% (APR with monthly compounding)? b.
What is the present value of $3,000 paid each year forever, assuming a discount rate of 5% and the first payment occurs one year from now? Equivalently: What amount would you have to invest today at an interest rate of 5% to generate an annual payment of $3,000 forever?