Answered: The annuity expressions and interest…

Business

Economics

The annuity expressions and interest factors may only be used when the payment frequency is annual. a True b False

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: If $ 5000 shall accumulate for 10 years at 8% compound quarterly. Find the compounded interest at…

A: Given information is: Principal amount (P)= $5,000 Time period (t)= 10 years Interest rate (r)= 8%…

Q: what is the total compounding period for 6 years 9 months converted quarterly?

A: The timeframe/period between the compounding of interest. For instance, in the event that one has a…

Q: A man secured a 8,057 loan at 2% interest rate, Find the annual amortization to extinguish it in 1…

A: Loan amount = 8057 Interest rate = 2 % Monthly rate = 2 / 12 = 0.167% Time = 12 months Therefore…

Q: a perpetuity has a price of $750 and an annual interest payment of $35,

Q: Your visa card charges 1 % interest every month, what are the nominal and effective interest rates…

A: The nominal interest rate per year can be calculated as follows: Thus, the nominal interest rate is…

Q: 18 YEAR ANNUITY WITH 7.86% COMPOUNDED HOW MUCH TO PAY TO RECEIVE $1900 ANNUALY OVER 18 YEAR PERIOD

A: Compounding refers to a process in which the interest rate is charged on the investment as well as…

Q: 1, $5,200 is invested each year at 4% compounded annually for 10 years. At the end of this time,…

A: Future value is a value of an investment or asset on a specific date in the future. To put it…

Q: Simple and Compound Interest . Calculate the amount deposited 1 year ago to have SR1000 now at an…

A: An interest rate is the amount of interest due per period, as a proportion of the amount lent,…

Q: SITUATION1: Five hundred pesos (P500.00) is deposited monthly to an account earning 7% compounded…

A: This is calculated using the following formula:FV = P * (1 + r/n)n*twhere:FV is the future valueP is…

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: $9000 is deposited into a savings account at the end of each year for 20 years. If the account pays=…

A: here we calculate how much value will the account have at the end of the 20 years period by…

Q: You invest $5,000 per year at 8% nominal interest compounded quarterly. What is the future value…

A: Compound Interest is the interest calculated on the initial principal and also on the accumulated…

Q: If you deposit $5000 into an account paying 6% annual interest compounded semi-annually, how…

A: Given the deposit amount = $5000 Interest rate = 6% Future amount = $8000

Q: Please show work

A: According to the question, an investment of $2,000 has made for 20 years at 8% per year. The amount…

Q: company must pay a $308, 000 settlement in 3 years. What amount must be deposited now at 8%…

A: Here, we calculate the given as follow;

Q: Compute the number of years (t) if future value (FV) = $13514, present value (FV) = $1186, and…

A: The formula for calculating the present value from the future value is :- PV = FV / ( 1+i)t

Q: 500 is invested in an account each month. nonthly, what is the account balance after 3

A: Compound interest is used to calculate loan or deposited amount. Given that, Starting amount is…

Q: Past costs not relevant to decisions because they cannot be changed no matter what actions are…

A: In a market, a firm faces different types of costs when making an investment and production…

Q: A person earning $50,000 annually wants to save money for a scholarship. He will save 15% of his…

A: Person's earning is 50000 per year and his salary increases 10% annually. And he saves 15% annually…

Q: If the nominal interest is 12% compounded continuously, compute the effective annual rate of…

A: The effective annual interest rate is the genuine interest rate on an investment or loan since it…

Q: Elysa bought a car priced at $10,591 for 9% down and equal monthly payments for 6 years. If interest…

A: Loans are paid by equal and fixed monthly installments and these payments carry the payment for…

Q: If you want to have $100,000 in your saving account in ten years, how much do you need to deposit…

A: The compounded monthly means interest is calculated and added to the principal monthly, while…

Q: after 5 years if the account earns 8.0% interest compounded annually? Be sure to include a cash flow…

A: Cash Flow (CF) is the increase or decrease in the amount of money a business, institution, or…

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

Q: Lara deposited 1000 in her bank account at the beginning of every quarter for 9.5 years. Interest…

A: Compounded quarterly "it is the interest amount earned quarterly on an account or investment where…

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: 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: Vince loaned a certain amount from a cooperative and promised to pay it back with 2.33 times his…

A: Loan Amount = A Maturity Amount = 2.33A r = 10.42%

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 periodic payments PMT necessary to accumulate the given amount in an annuity account.…

A: We are required to accumulate an amount of $80,000, therefore, this amount is the future value. FV =…

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: At certain interest rate compounded quarterly, an amount worth P8000 will be P20000 after 5 yrs. How…

A: Given Present value P=8000 Value after 5 years =20,000 Compounded period = quarterly. First we will…

Q: You borrow $6,000 for 90 days at 6.5% interest. The lender uses a 365-day year. You make a payment…

A: Simple interest refers to the borrowing cost of money without consideration for the effects of…

Q: If the effective interest rate is 20% per annum, what is the Nominal Rate if it is? A.Compounded…

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

Q: Determine the present equivalent value of $400 paid over a period of 7 years in each of this…

A: Present Equivalent value tells about the amount needed to produce a series of payments in the future…

Q: The balance of an account continuously compounded was $2006 after 7 years and $6790 after 12 years.…

A: According to the question The amount is compounding continuously, it will give $2006 after 7 years…

Q: Suppose you take out a car loan of $15,000 with an interest rate of 15% compounded monthly. You will…

A: Hello, thanks for the question. Since there are multiple subpart questions posted here, as per the…

Question

The annuity expressions and interest factors may only be used when the payment frequency is annual.

a True

b False

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 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, economics and related others by exploring similar questions and additional content below.

Similar questions

What is the future worth of each given series of payments?(a) $8,000 at the end of each year for five years at 7% compounded annually.(b) $10,000 at the end of each year for eight years at 8% compounded annually.(c) $18,000 at the end of each year for 20 years at 10% compounded annually.(d) $7.000 at the end of each year for 12 years at 12% compounded annually.
John borrows $10,000 at 18% compounded annually. He pays off the loan over a 5-year period with annual payments. Each successive payment is to be 10% less than the previous payment.. How much was the first payment?
If a person deposit 2000$ 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.
all subparts please thank you
I need help with this problem I'm getting the final answer as 13,565.24 but it is incorrect. The correct answer is 16,247 using the annuity formula. please solve and show all of your work
Find the APY in each of the following cases:(a) 10% compounded annually.(b) 9% compounded semiannually.(c) 12% compounded quarterly.(d) 7% compounded daily.
An executive invested 1M to an account that earns 8% compounded continuously. Determine the amount of his money at the end of 20 years.
A man wishes his son to receive $ 200000 after 10 years from now. What amount should he invest if it will earn interest of 10% compounded annually.
Find the present worth of a perpetuity of 1,000 annual payments with interest of 6%.
25% consumer loan interest is applied for the car loan of 20 thousand liras you have received today. your due date. In the end, you paid 61,035 liras. How long is the maturity of this loan?
Jana invested a hundred thousand pesos in an account now. After eight years, she withdraws the principal. The remaining amount is then left for another eight years. If the interest is 5% semi-annually, what will be the withdrawable amount at the end of the sixteenth year?