Masuku agrees to pay R250 at the beginning of each year for 15 years. If money is worth 42% p.a. Find the value of the remaining payments just before he makes the sixth payment. A. R2 067.20 B. R2 067
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- 6. Mahmoud has to pay three equal payments of $50,000 for a house he is buying, The payments are at the end of year five, 10 and 15, respectively. If the interest rate is 14% how much would he take as a loan to pay for the house? b. а. If Mahmoud decides to pay the remaining balance after paying the second installment in year 10 immediately, how much would he pay at the end of year 10 as repayment for the unpaid balance?2. A friend who owns a perpetuity that promises to pay $1,000 at the end of each year,forever, comes to you and offers to sell you all of the payments to be received after the25th year for a price of $1,000. At an interest rate of 10%, should you pay the $1,000today to receive payment numbers 26 and onwards? What does this suggest to youabout the value of perpetual payments?16. Hanson borrows GHC 900.00 from Kwesi and the same amount from Mingle to start a business. He agrees to pay Kwesi 15% of the profits of the business cach year. He also agrees to pay Mingle 10% of the annual profits in addition 3% interest on his loan each year. a. Find how much Kwesi is paid in a year in which Mingle receives GHC 48,000.00 b. How much is Kwesi paid a year in which he receives GHC 12,750.00 more than Mingle?
- Martha receives $100 on the first of each month. Stewart receives $100 on the last day of each month. Both Martha and Stewart will receive payments for five years. At an 8% discount rate, what is the difference in the present value of these two sets of payments? A. $32.88 B. $40.00 C. $99.01 D. $108.00 E. $112.50A man is left with an inheritance from his father. He has an option to receive P2M at the end of 10 years, however he wishes to receive the money at the end of each year for 5 years. If interest rate is 8%, how much would he receive every year? a. 352,533.00 b.200,000.00 c. 400,000.00 d.232,020.00Iris expects to receive $1,000 at the end of each of the next three years. She will deposit these payments into an account that pays 10%, compounded semi-annually. What will be the future value of these payments, that is, the value at the end of the third year? a. $3,318.01 b. $1,340.10 c. $1,157.63 d. $1,331.00
- Mr. Aragon loans P200,000 from a bank with interest at 6% compounded annually. He agrees to pay his obligations by paying 8 equal annual payments, the first being due at the end of 10 yrs. Find the annual payments. a.P55,413.37 b.P54,314.37 c.P54,413.37 d.P45,413.3724. Seth's LTCI policy will pay him a daily benefit of $150 and a lifetime maximum based on five years. What is the pool of money under this policy? (Search Chapter 6) a. $182,500 ob. $295,000 OC. $250,700 Od. $273,750Mae expects to receive $1,000 at the end of each of the next three years. She will deposit these payments into an account which pays 10%, compounded semi-annually. How much will be the future value of these payments, that is, the value at the end of the third year? a. $7,986.00 b. $3,318.01 c. $3,993.00 d. $665.50
- Every three years, D will pay Mr. J 5,000 at 8% rate to settle his loan. Mr. D will use which formula to compare with cash payment? A. Future value of IB. FV of AnnuityC. Present Value of ID.1. A house costs P500,400 cash. A purchaser will pay P100,000 cash, P50,000 at the end of 2 years and a sequence of 6 equal annual payments starting with one at the end of 4 years to discharge all his liabilities at 7% compounded annually. Find the annual payment which may be made for 6 years. 2.Mr. Tolentino wants to deposit a lump sum on the day his son is born into an account bearing an interest of 5% compounded annually in order to withdraw P35,000 each on his son's 18th, 19th, 20th and 21st birthdays How much is the lump sum?1. A man was offered a landbank certificate with a face value of P 100,000 which is bearing an interest rate of 8% per year payable semiannually and due in 6 years. If he wants to earn 6% semiannually, how much must he pay the certificate? Ans. P 90614.92
