The income stream b = (1000, 1500, 2500, 4000) consists of payments made at the end of the next four years. Find the present value of b for an interest rate of 9% compounded annually.
Q: How much annual income would need to be generated over a 5 year period, to be equivalent to $4,000…
A: Calculate the annual income over a period of 5 years as follows:MS-Excel --> Formulas -->…
Q: The annual interest, compounded annually at which $510 must be invested for it to grow to $2,005.82…
A: Present value (P) = $ 510 Future value (F) = $ 2005.82 Period (t) = 11 Years
Q: Suppose a principal of 2500 Rials accumulated to 4000 Rials over a period of 8 years. Determine the…
A: The interest rate can be calculated with the help of continuous compounding function
Q: What is the present worth of the followingseries of payments?(a) $1,500 at the end of each year for…
A: A series of recurring fixed payments over a particular period of time is called as annuity. To…
Q: It value of in two years, at 12% compounded annualy, is (rounded to nearest dollar). Use the…
A: Present Value The value in the present of a sum of money, in contrast to some future value it will…
Q: w much will be in an account at the end of five years the amount deposited today is $10,000 and…
A: The given problem can be solved using FV function in excel. FV function computes future value for…
Q: The present worth of of P40,000 in the first year and amounts of decreasing by P3,000 per year…
A: Cash flow is decreasing by 3,000 each year and the present value of cash flow is calculated by the…
Q: Suppose that a company borrows 20,000 for 1 year at a stated rate of interest of 9 percent. What is…
A: Annual percentage rate (APR) if interest is paid to the lender annually = (1 + Stated rate / Number…
Q: How much compound interest is earned on a 6.5-year investment that has a rate of return of…
A: Future value (FV) = $ 9600 Period = 6.5 Years Period in quarters (n) = 6.5*4 = 26 Interest rate = 6%…
Q: If money is worth 8% compounded quarterly, compute the present value of the perpetuity of ₱1,000…
A: Perpetuity is the stream of cash flows or payments that are made at equal intervals that do not have…
Q: What is the future equivalent at EOY 8 of $5,000 annual payments made at the beginning of each year…
A: Since you have asked multiple questions, we will solve the first question for you. Please ask…
Q: Compute the future value of annual payments of $1,000, paid for 4 years, using an interest rate of…
A: Future value can be defined as the future worth of the present cash flow that will be received from…
Q: nual, semiannual, and quarterly compunding periods, (1) calculate the future value if $5000 is…
A: Future value can be computed using FV function in excel. FV function computes interest rate for…
Q: 1.If money is worth 5% compounded semi annually, find the present value of a sequence of 12 semi…
A: 1) Interest rate (r) = 5% per annum = 2.5% semiannually Each payment (P) = P 450 Total payments (n)…
Q: What is the equivalent present value of the following series of payments: $10,000 the first year,…
A: Calculate the equivalent present value as follows:
Q: If $650 is invested at 6% compounded (A) Annually, (B) Quarterly, (C) Monthly, what is the amount…
A:
Q: Use the formula for computing future value using compound interest to determine the value of an…
A: Deposit amount (P) = $ 12000 Period = 5 Years Number of quarterly period (N) = 5*4 = 20 Annual…
Q: What are the future value and the interest earned if $3400 is invested for 6 years at 8% compounded…
A: Future value is the value of present cashflow compounded at the specified rate to future date.…
Q: P100 is received at the end of one year, P500 at the end of two years, and P1000 at the end of three…
A: Present value is the sum of discount value of all future cash flows.
Q: Suppose a principal of 2500 Rials accumulated to 4000 Rials over a period of 8 years. Determine the…
A: The nominal rate can be computed with the help of future value function and logarithm values.…
Q: An investment of S6,560 earns interest at the rate of 5% and is compounded quarterly. What is the…
A: Investment = 6560 Interest rate = 5℅/4 = 1.25℅ per quarter N = 28 quarters (7 years)
Q: Using the following partial table of present value of $1 at compound interest, determine the present…
A: The present value method is used to evaluate the different levels of investment projects. With the…
Q: What is the present value of P2,500 semiannual payments received at the beginning of each period for…
A: Please refer to the image below
Q: how many years is required for $3,000 to increase by $4,000 if interest at 14% compounded quarterly
A: Investment can be defined as depositing funds in an asset to earn a profit or interest. Interest is…
Q: Evaluate the net present value of following streams of income: a. $1000 per year at an interest rate…
A: Present Value of Perpetuity = Perpetual Income / Interest Rate
Q: At what interest rate will ₱30,750 amount to ₱44,875 in 4 years and 6 months, if interest is…
A: Data given: Description Data FV (P) 44875 PV (P) 30750 r= rate (Compounded semiannually)…
Q: Use the formula for computing future value using compound interest to determine the value of an…
A: The future value of the account can be computed by using the future value of a single deposit…
Q: Use the formula for computing future value using compound interest to determine the value of an…
A: Here, Principal Amount (PV) is $13,000 Annual Interest Rate (r) is 3% Compounding Period (m) is…
Q: What is the future value of four cash flows of $500 to be received at the end of each of 4 years…
A: Future value: This is the amount of present value accumulated or compounded at a rate of interest…
Q: Assume the following annual payments of notes payable of Demi Company with 10% discount rate. 1st…
A: Time value of money concept says that a sum of money invested today will have more value in future…
Q: Suppose an income stream will produce income at a rate of 4000 + 1000t dollars per year for 5 years,…
A: Present value Present value of an amount with continuous compounding. With continuous compounding…
Q: A one-time investment is made in the amount of $9,200 for 15 years at an APR of 6%. Compound…
A: given, principal = $9200 rate = 6%
Q: A lot purchased for $4,500 is held for five years and sold for $13,500. The average annual property…
A: Long Term Capital gain is the gain on sale of property held for more than 2 years. It is the…
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 total interest paid equals the borrowed principal over 20 years, determine (a) the applied…
A: Assuming Present Value = Interest Paid = 1000 Future Value = Present Value + Total Interest paid…
Q: A principal, $30, is invested at 6% interest for 2 years. Determine the future value if the interest…
A: Future value is the worth of any asset or any sum of money at a future date when such asset or…
Q: Compare the interest earned by P dollars at i% per year simple interest with that earned by the same…
A: Time value of money- It is based on the concept that money earned today is worth more than similar…
Q: A payment of $1,750 is due in 2 years, and $5,800 is due in 5 years. What single payment made today…
A: To calculate the single payment of the payment due $ 1750 and $ 5800 in year 2 and year 5…
Q: compute the amount of compound interest (in $) earned in 1 year and the annual percentage yield…
A: Compound Interest is the interest that is calculated on the initial principal and on the interest…
Q: Compare the interest earned by $9,000 for five years at 8% simple interest with interest earned by…
A: Time value of money- It is based on the concept that money earned today is worth more than similar…
Q: If an investment grew to $15,000 in 2 years and the interest amount earned was $1,000, calculate the…
A: Investment means engaging your funds to earn some additional money over the period. interest is a…
Q: A continuous stream of income is being produced at the constant rate of $60,000 per year. Find the…
A: Present Value(PV) is worth of amount that is received or paid future date at current time. It is…
Q: Using the compound interest formula, calculate both the value of the investment and the interest…
A: Investment amount (PV) = $4000.00 Period = 5 Years Semi annual period (n) = 5*2 = 10 Interest rate =…
Q: what is the present value of a stream of payments that begin in year one at $5000 and increase by…
A: Information Provided: Interest rate = 8% Year 1 payment = $5000 Increment in payment = $500
Q: For a sum of 1,050 to triple itself in 8 years and 6 months, what must be the rate of interest…
A: Investment amount (PV) = 1050 Future value (FV) = 1050*3 = 3150 Period = 8 Years and 6 Months Semi…
Q: Determine how much is in each account on the basis of the indicated compounding after the specified…
A: As per the guidelines we are allowed to solve the first three parts only The account value can be…
The income stream b = (1000, 1500, 2500, 4000) consists of payments made at the end of the next four years. Find the present value of b for an interest rate of 9% compounded annually.
Step by step
Solved in 2 steps with 2 images
- What is the equivalent present value of the following series of payments: $10,000 the first year, $11,000 the second year, and $12,000 the third year? Consider 4% interest, compounded annually.Consider two perpetuities (X and Y) at interest rate i. X provides level payments of $105 at the end of each year. Y provides a payment of $5 at the end of the first year, with payments increasing by $5 annually. Find i such that the present value of (X-Y) is a maximum. (Answer to the nearest .05%.)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 future value of $537 to be deposited today into an account paying 8.0% compounded semi- annually for two years?The principal P is invested at the interest rate of r/year for t years. (Use a 365-day year.) P = $110,000, r = 4%, t = 7 1 4 , compounded monthly.Determine i, the compound interest rate.Find the accumulated amount A if the principal P is invested at the interest rate of r/year for t years. (Use a 365-day year. Round your answer to the nearest cent.) P = $43,000, r = 9 3/4 % t = 9, compounded quarterly A = $
- 1. A lump sum of $30,000 is invested at 6% compounded monthly for 15 years. For 15 years it then pays out a payment at the end of every month while earning 5.4% compounded monthly. What is the payment amount of the annuity? Follow the steps below. a. Draw a timeline HERE. b. Identify the following values: CY = PY = N (number of compounds) = N (number of payments) = i for accumulation phase = i for annuity payment phase = c. Calculate the accumulation value of PV d. Then, using the value at 15 years you can solve for the annuity payment amount (this is the answer to the question).Suppose an annuity pays $2000 at the end of each 3 month period for 3.5 years at an interest rate of 4%, compounded quarterly a. find the total number of periods b. find the real interest rate per period c. find the present value (give the formula)Suppose you are a beneficiary designated to immediately receive P8674 each year for 10 years, earning an annual interest rate of 6%. The future value of the stream of income payments is Round your answer to 2 decimal places. Add your answer
- In each situation described below, identify the initial payment, the term interest rate, andthe number of compounding periods. An investment of $5000 at an APR of 3% compounded monthly, followed by anotherinvestment of $5000 made 2 years after the first. What is the value of the account after5 years?Find the accumulated amount A if the principal P is invested at the interest rate of r/year for t years. (Use a 365-day year. Round your answer to the nearest cent.) P = $120,000, r = 2.75%, t = 4, compounded dailyComplete the following using compound future value. Time 2 years, Principal $15,000, Rate 8%, Compounded quarterly. What is the amount? What is the interest?