What is the present value of a perpetuity of $100 if the appropriate discount rate is 7%? If interest rates in general were to double and the appropriate discount rate rose to 14%, what would happen to the present value of the perpetuity?

Q: 1. Lottie wants to have a fund that would pay annual payments to her son of Php200,000 a year…

A: 200000 / 0.05 = 4,000,000 so answer is $4000000

Q: a. The present value of $25,000 each year for 4 years at a / percent interest rate b. The present…

A: The formula for calculating the Future Value is: FV= PV(1+r)nwhere,FV= Future ValuePV= Present…

Q: explain each factors of interest rate

A: In economics, an interest rate refers to the amount of money that a borrower has to pay back to a…

Q: Investment X offers to pay you $5,500 per year for nine years, whereas Investment Y offers to pay…

A: An investment is an asset or item acquired with the goal of generating income or appreciation.…

Q: In five years, you want to be able to buy a new car for $30,000. If the interest rate is 3 percent a…

A: Prevent value refers to the sum of money that needs to be invested to reach a particular sum in the…

Q: makes rental payments of $1,200 per month and wants to know the present value of their annual…

A: * SOLUTION :-  * 3) The monthly payment is computed as shown below: * Present value = Monthly…

Q: There is a 4-year, 3 percent coupon bond with 3.5 years Duration. If the market interest rate…

A: Given: Time=4 years Bond %=3 Duration=3.5 year Original yield=9% New yield=9.15%

Q: 1) Assuming that the current interest rate is 3 percent, compute the present value of a 5-year, 5…

A: The current interest rate is 3%.  The coupon rate is 5%.  The face value of a bond is $1000.  Number…

Q: A local bank advertises the following deal: "Pay us $100 at the end of each year for 10 years and…

A: Using a proper discount rate, a measure known as the present value (PV) can be used to determine…

Q: T3

A: Given: The original price of a bond is = $1,000 The fixed annual interest payment is = $150 The…

Q: If the interest rate is 8 percent, the present value of $200 paid one year from now equals $ If the…

A: Present value is the value of investment in today's dollar.  Future value is the value of investment…

Q: H6. a. what is the present value of a two year income stream $10,000 in year 1 and $10,000 in year 2…

A: Present Value refers to the value of a series of income streams or series of cash payments…

Q: 4. With an interest rate of 5 percent, the present value of $100 received one year from now is…

A: Present Value = Future Value/(1+r)^N PV = 100/(1+0.05)^1 PV = 95.238

Q: You want to have no less than a million dollars in the bank when you retire. You think you can save…

A: Total Savings in the bank during retirement is $1000000Total savings this year is $5000The increment…

Q: You are considering taking out a two-year loan of$1,000 from a bank, on which you can pay…

A: Case 1 : Compound yearly interest Principal (P) = $1,000 Interest rate (r) = 1% Time period (t) = 2…

Q: 10. Suppose the interest rate is 5% and that you are to receive three annual payments of $10,000,…

A: The present value is an important financial concept popularly used by business firms and individuals…

Q: Suppose that the interest rate is 4 percent. What is the future value of $100 four years from now?…

A: Interest rate = 4%Principal amount = $100

Q: Hi! Can you help me with the question below? Matt has the choice between receiving $100 now or…

A: Matt has the choice between receiving $100 now or receiving $140 in two years. Simple interest…

Q: Evaluate (discussing positives and negatives of) the effect of interest rates on consumer choices.

A: Interest rate: - it is the percentage charge on the principal amount by a lender to a borrower.

Q: Question 1 a. What is the significance of a demand curve and a supply curve? b. Suppose $2,000 is…

A: Since you have posted multiple questions, as per the guidelines we can solve only one question( with…

Q: minutes please with

A: Given Constant monthly payment = 3000 $ Time = 15 years Interest rate = 8 % Monthly rate = 8 / 12 =…

Q: 10. Lawrence has just won $6,250 from the 50/50 at the Sea Dog's game and decides to invest all of…

A: Given that, Principal = $6250 Interest = 6.5% Interest = $1480 (Compounded or Simple Interest) Time…

Q: You will need $100,000 in seven years to buy a new car. How much money do you need to deposit in the…

A: Present value is the value of investment in today's dollar.   Future value is the value of…

Q: Consider that you were given a US savings bond that will pay $100 when it matures in ten years. What…

A: Bonds are tradable assets that are securitized versions of corporate debt issued by businesses.…

Q: A man has a simple discount note for $6,100, at an ordinary bank discount rate of 8.61%, for 60…

A: Lets saydiscount note (M) = 6100discount rate (D) = 8.61%Time (T) = 60/365

Q: Akhisha wanted to buy a cell phone which will have a price of P13,000 for 90 days from now due to…

A: Given  The future value of cell phone 60 days from now = P13000 Rate of interest =12% simple…

Q: Sali would like to send her parents on a cruise for their 25th wedding anniversary. She has priced…

A: Given, Future amount, F= $15, 000 interest rate, i= 10% time period, n= 5 years

Q: Discuss any three factors that determine Interest Rates?

A: Interest rate is the rate at which the money is traded . Money is like a normal goods an interest…

Q: Please show work

A: The Future value of lottery amount is $500,000 in 35 years.Interest rate is 5%.

Q: Describe what is Market interest rate?

A: The rate of interest which is determined by the interaction of demand for and supply of funds in the…

Q: What is the present value of $100 paid two years from now when the interest rate is 10 percent?

A: Given value  of $100 paid 2 years from now Interest rate = 10 % Time = 2 years

Q: Economists recently define interest rate as "a discount rate used to reduce a future value to…

A: Borrowings: It is a credit taken by the public authority and falls under capital receipts in the…

Q: the interest rate is 10 percent, the present value of an annual payment of $100,000 to be received…

A: The present value of perpetuity depends on the rate of interest or the discount rate.

Q: Why interest rates differ at any given time a range of interest rates prevails in the economy. what…

A: The money market equilibrium is determined where money demand is the money supply. It helps in…

Q: Bill plans to fund his individual retirement account (IRA) by contributing $2,000 at the end of each…

A: A person saves money for his retirement in order to be able to sustain himself when he is unable to…

Q: 1. You purchased a bond for $925. The bond has a face value of $1,000 and it pays a dividend once a…

A: Solution:- a)  a) Purchase price = $925 ; Sale Price = $850. Loss on bond buying then selling =…

Q: percent per year, 2. how much would they have today? The same company has an investment project that…

A: Present value is the concept that states an amount of money today is worth more than that same…

Q: If a simple discount bond sells above par, what do you know about the interest rate?

A: A bond is basically said to be issued at a discount if it is sold for less than its par value, also…

Q: Suppose you buy a house for $175,000. One year later, the market price of the house has risen to…

A: Return on investment can be calculated as follows.

Q: Net Present Value A farmer is deciding whether or not to purchase a new tractor that has an expected…

A: Present value is the value of investment in today's dollar.  Future value is the value of investment…

Q: Suppose you received a US savings bond as a gift, and the bond pays $100 at maturity, which is ten…

A: Bond is a financial instrument that ensures a fixed income to the buyer or the investor.