What is the present value of $25,000 to be recieved in 15 years at a (a) 6.2 percent rate and (b) 9.6 percent rate? Explain why the present value is lower when the interest rate is higher?
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What is the present value of $25,000 to be recieved in 15 years at a (a) 6.2 percent rate and (b) 9.6 percent rate? Explain why the present value is lower when the interest rate is higher?
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- (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?What is the present value of $25,000 to be received in 15 years at an (A) 6.2% interest rate and (B) 9.6% interest rate? Explain why the present value is lower when the interest rate is higher.a. What is the present value of 15 annual payments of $100, with the first payment one year from now, if the discount rate is 0.05? b. What is the present value of 15 annual payments of $100, with the first payment right now, if the discount rate is 0.05? c. What is the present value of 15 annual payments of $100, with the first payment five years from now, if the discount rate is 0.05? d. At what discount rate would the present value of 15 annual payments of $100, with the first payment right now, be 0? e. How many annual payments of $100, with the first payment right now, would it take to be worth more than $1,000, if the discount rate is 0.05? f. What is the value of 15 annual payments which begin at $100 one year from now and increase at 2% per year thereafter, if the discount rate is 0.05?
- Using the principal amount of 194000. What is the simple payback period if the annual simple interest is 25000?What is the present value of perpetuity of $100 per year if the appropriate discount rate is 7 percent? If interest rates in general were to double and the appropriate discount rate rose to 14 percent, what would happen to the present value of the perpetuity?value of a future payment change as the un to recelpt is lengthened? As the interest rate increases? What's the difference between an ordinary annuity and an annuity due? Why would you prefer to receive an annuity due for $10,000 per year for 10 years than an otherwise similar ordinary annuity? iii.
- Which of the following changes would increase the present value of a future payment? (check all that apply) Decrease in the number of years until the future payment is received Increase in the interest rate Increase in the amount of the payment Decrease in the interest rate Increase in the number of years until the future payment is receivedWhat is compounding? What’s the difference between simple interest and compoundinterest? What would the future value of $100 be after 5 years at 10% compoundinterest? At 10% simple interest? ($161.05, $150.00)what;s the present value of perpetuity that pays % 1, 563 per year if the appropriate interest rate is 6.8% ?
- the present value of perpetuity that pays 500,000 per year if the appropriate interest rate is 10% is 50,000,000 is it true or false?A. What is the present value of a $500 perpetuity if the interest rate is 9%? Round your answer to the nearest cent. B. If interest rates doubled to 18%, what would its present value be? Round your answer to the nearest cent.Solve the questions below: a. What is the future value of $1,750 in 3 years at an interest rate of 4 percent? b. What is the future value of $1,750 in 3 years at an interest rate of 5 percent? c. What is the future value of $1,750 in 3 years at an interest rate of 6 percent? d. What is the present value of $2,350 in 5 years at an interest rate of 3 percent? e. What is the present value of $2,350 in 5 years at an interest rate of 4 percent?