Using the compound interest formula, verify the impact of the 2% commission rate identified in this video, 63% difference. Specifically, compare 5% vs 7% compounded annually on the amount (A) over 50 years using principal (P) = $10,000. Then, calculate the difference in the two amounts (A) for the same principal over 10 years. What can you conclude from your analysis?
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Using the compound interest formula, verify the impact of the 2% commission rate identified in this video, 63% difference. Specifically, compare 5% vs 7% compounded annually on the amount (A) over 50 years using principal (P) = $10,000. Then, calculate the difference in the two amounts (A) for the same principal over 10 years. What can you conclude from your analysis?
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- Compute the following with the data provided: (Show sufficient work with formulas used and all the steps involved ) A=$12, 500.00 per Quarter r=7.5% N=12 years Present Worth if the interest is compounded monthly? Future Value if the interest is compounded Quarterly: Present Worth if the interest is compounded continuously?Percentages need to be entered in decimal format, for instance 3% would be entered as .03 in cell B12.) Set up an amortization schedule for a $60,000 loan to be repaid in equal installments at the end of each of the next 20 years at an interest rate of 20%. What is the annual payment? After you input the data for each scenario, click on the Graph tab (second tab on the worksheet) and look at the Principal and Interest portions of the payments throughout the years. What do you notice about the amount of Principal and Interest over the years (which amount is higher in the early years, and which amount is higher in the later years) of the loan? What do you notice about the difference in Principal and Interest in the 10% scenarios compared to 20% scenarios?Assume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual income. Also assume the investment's value has increased to $7,050 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.
- using excel do the following Create an amoritization schedule for a $1,000,000 loan that requires equal annual payments in each of the next 10 years. The annual rate is 6%. How much is the remaining loan balance after 5 years? Analyze the amount of each equal payment that goes towards interest and principal in each year. What do you notice?Use the following information to answer the question(s) below. Consider the following four alternatives: $132 received in two years. $160 received in five years. $200 received in eight years. $220 received in nine years. The ranking of the four alternatives from most valuable to least valuable if the interest rate is 7% per year would be: A) 1, 2, 3, 4 B) 4, 3, 1, 2 C) 3, 4, 2, 1 D) 3, 1, 2, 4For each of the following situations involving annulties, solve for the unknown. Assume that interest is compounded annually and that all annulty amounts are received at the end of each period. (/= Interest rate, and n = number of years) Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. 2. 3. 4. 5. Present Value 248, 196 442,750 650,000 175,000 Annuity Amount $ 5,000 80,000 60,000 155,040 8% 11% 10% n = 5 4 10 4
- If you borrow $12,500 with an interest rate of 4 percent, to be repaid in five equal yearly payments at the end of the next five years, what would be the amount of each payment? Use the appropriate factor(s) from the tables provided (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D)A loan of $5,000 with interest at 7.75% compounded annually is amortized by equal payments at the end of each year for five years. 1. Show your financial calculator inputs for the payment calculation. 2. Create a full amortization schedule for the loan. A template is available in the Test folder (underneath the link to our test. You can fill in the Word file template and attach below,Consider the followingalternatives: i. $120 received in one year ii. $220 received in five years iii. $350 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 7% per year. b. What is your ranking if the interest rate isonly 2% per year? c. What is your ranking if the interest rate is 14% per year?
- Find the following values.Compounding/discounting occurs annually.a. An initial $200 compounded for 10 years at 4%b. An initial $200 compounded for 10 years at 8%c. The present value of $200 due in 10 years at 4%d. The present value of $1,870 due in 10 years at 8% and at 4%e. Define present value and illustrate it using a time line with data from part d. How are present values affected by interest rates?CZ Enterprises borrows $202,775 at an interest rate of 10% today and will repay this amount by making 10 semiannual payments. Payments begin in six months. What is the amount of the payments that CZ will need to make? (Use the present value and future value tables, a financial calculator, a spreadsheet or the formula method for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answer to the nearest cent, $X.XX.) CZ will need to make payments of $ 26,260.31.Fill in the table below when P= $9,000, S= $3,000 (at the end of four years), and i = 12% per year. What is the equivalent uniform CR? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. Complete the accompanying table. (Round to the nearest dollar.) Loss in Value Capital Recovery Amount for Year Investment Opportunity Cost of Interest of Asset at Beginning of Year $9,000 During Year $2,500 Year (=12%) 2 1,500 3 1,500 4. The equivalent uniform CR is (Round to the nearest cent.)