What is the value of an investment that pays $54,000 every other year forever, if the first payment occurs one year from today and the discount rate is 18 percent compounded daily? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

What is the value of an investment that pays $54,000 every other year forever, if the first payment occurs one year from today and the discount rate is 18 percent compounded daily? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 12MC: (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest...

See similar textbooks

Related questions

Q: What is the value today of $4,300 per year, at a discount rate of 10 percent, if the first payment…

A: First payment is received 6 years from today and last 20 years from today. Therefore, total payments…

Q: If you have $5500 to invest now, and will need a total of $25,000 -- 10 years from now, determine…

A: Present Value The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: If an investment of $5,000 is made in an account returning 2% p.a. then how long will it take for…

A: Using excel NPER function

Q: You are considering taking out a loan of $6,000.00 that will be paid back over 11 years with…

A: Loan amount (L) = $6000 Quarterly payment (Q) = $185.41 r = 5.8% per annum = 1.45% per quarter

Q: If you save $1,900 at the beginning of every year for ten years, for how long can you withdraw…

A: Annuity refers to a cashflow screen of equal amount at equal time intervals or in simple words…

Q: How much will your investment be worth in 17 years at each bank?

A: Time value of money (TVM) means that the amount received in the present will have more value than…

Q: You are considering taking out a loan of $10,000.00 that will be paid back over 9 years with…

A: loan amount (p)=$10,000 n=11 payment m=4 pmt=$360.02 r=5.9%

Q: If you have $4500 to invest now, and will need a total of $25,000 -- 10 years from now, determine…

A: Amount available now (PV) = $4500 Period = 10 Years Monthly period (n) = 10*12 = 120 Interest rate =…

Q: a) A man has invested $5350 in a savings account that pays 12% simple interest. How long will it…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: How many years (and months) will it take $2 million to grow to $4.00 million with an annual interest…

A: Years (and months) will it take $2 million to grow to $4.00 million with an annual interest rate of…

Q: What annual rate of return is earned on a $1,000 investment when it grows to $2,700 in eight years?…

A: Return can be calculated as: Return = Closing Value - Opening ValueOpening Value Substituting the…

Q: What would be the future value of $7,992 invested annually for nine years beginning one year from…

A: future value formula: future value =A×1+rn-1r where, A=annuity r=rate of interest n=number of years

Q: Suppose you invest $1,400 for seven years at an annual percentage rate of 8 percent. a. What is the…

A: Future Value = Present value * (1+r)^n Where r = rate per period n = no. of compounding period…

Q: A sum of money invested now at 10 percent compounded semi-annually is to provide payments of $1500…

A: Let the money to be invested now = X Semiannual payment (A) = $1500 Number of payments (n) = 16 r =…

Q: With an interest rate of 8%, how long does it take for an investment of $10, 400 to grow to $20,…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: What annual rate of return is earned on a $5,000 investment when it grows to $9,000 in five years?…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: This question consists of four main parts. When performing the calculations, keep as many decimal…

A: The time value factor states that money received today will have more worth than the same amount of…

Q: You are considering taking out a loan of $14,000.00 that will be paid back over 8 years with monthly…

A: Equity in a home refers to how much of that home's value a person has already invested in it.

Q: a. What is the effective annual interest rate based on a 6 percent nominal annual rate and monthly…

A: Effective Annual Rate: It is the annual rate of the investment considering the effects of…

Q: You are scheduled to receive $15,000 in two years. When you receive it, you will invest it for six…

A: Given,Money Received after 2 years and Present Value of the investment for 6 years (PV) =…

Q: If (P) dollars are invested at the end of each year in an annuity that bears interest at an annual…

A: The future value of a regular annuity amount can determine with the help of the future value of the…

Q: Assume you put $600 per month into a retirement account for 14 years, and the account has an APR of…

A: Given: Particulars Amount Payment(PMT) $600 Years 14 Interest rate 3.02%

Q: If $9,000 is invested at 6% per year compounded monthly, the future value S at any time t (in…

A: Future Value(FV) is value of any present amount in future period. It is computed by compounding that…

Q: What annual rate of return is earned on a $1,000 investment when it grows to $2,700 in eight years?…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: You have decided to set aside a fixed amount every quarter in order to have $12,000 available for a…

A: The amount to be deposited every quarter can be calculated with the help of future value of annuity…

Q: You have $5,000 to deposit. Regency Bank offers 15 percent per year compounded monthly (1.25 percent…

A: Data given:: Amount = $5000 Regency Bank offers = 15% compounded monthly (15%/12 = 1.25%) King Bank…

Q: If we are investing in an account with an interest rate of 5.7% compounded monthly and we wish to…

A: The amount to be placed in the account today is computed using the present value formula.

Q: How much would you have to pay into an account at the beginning of every six months to accumulate…

A: Future Value of Annuity =P(1+r)n-1r where P = Contribution r= Rate of Return n = Number of…

Q: An investment of P50,000 is made at the beginning of each month for 5 years. How much will the…

A: The investment value can be calculated as future value of annuity due

Q: An investment promises to pay into an account that pays you 6 percent annually, $150 per month for…

A: For this first find out future value factor annuity and find future value and than find value at end…

Q: A company wants to have $20,000 at the beginning of each 6-month period for the next 4years. If an…

A: Present value of annuity concept is required to use in this case. Present value of annuity is the…

Q: At the end of t years, the future value of an investment of $13,000 in an account that pays 9% APR…

A: Computation of number of years is as follows:S=130001+0.091212×twhere, s=3900039000=130001.007512×t…

Q: How many years (and months) will it take $2 million to grow to $4.80 million with an annual interest…

A: Using excel NPER function

Q: how much is this account worth in today's dollars?

A: Present value: It is the present worth of the annuity cashflows discounted over a period of time.…

Q: last payment is received 23 years from now? (Do not round intermediate calculations and round your…

A: Present Value is the todays value of the cash flows to be received in future . Present value…

Q: it is desired to save $20,000 by depositing $800 every 3 months in an investment that pays 8%…

A: Annuity means a set of finite number of payments which are the same in size and made in equal…

Q: how many years are needed to double a $100 investment when interest rates are 5.25 percent per year?…

A: Rule of 72: It is a method used to compute how long it will take for an investment to double its…

Q: You are scheduled to receive $18,500 in three years. When you receive it, you will invest it for…

Q: You are scheduled to receive $14,500 in three years. When you receive it, you will invest it for…

A: Calculating the amount have received at the 12th year. We have,The formula to compute the future…

Q: If an investment of $5,000 is made in an account returning 2% ,then how long will it take for the…

A: Future value is the value of the current assets or some amount that is invested today and amount…

Q: What amount would you have at age 65 if you contributed $260 a month starting today at age 25 and…

A: A series of continuous fixed payments at equal intervals for a number of periods is called annuity.…

Q: Suppose I have the choice of investing $25000 in two different accounts: Acct 1: 4.5%…

A: Future value is the value of present cashflow compounded to future date at specified rate. formula:…

Q: considering taking out a loan of $7,000.00 that will be paid back over 12 years with every 2 months…

A: Loan carry interest rate and both are paid by the equal periodic payments.

Q: An investment promises to pay into an account that pays you 6% annually, $150 per month for the…

A: In this question, first, we will calculate the future value of annuity after 22 years and then the…

Q: Using the rule of 72, approximately how many years are needed to double a $500 investment when…

A: GIVEN ÷ Investment amount = $500 Interest rate = 10%

Question

What is the value of an investment that pays
$54,000 every other year forever, if the first
payment occurs one year from today and
the discount rate is 18 percent compounded
daily? (Use 365 days a year. Do not round
intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction to Question:

VIEW

Step 2: Calculation of Effective annual rate :

VIEW

Step 3: Calculation of Present value of Investment :

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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, finance and related others by exploring similar questions and additional content below.

Similar questions

You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
What is the value of an investment that pays $75,000 every other year forever, if the first payment occurs one year from today and the discount rate is 7 percent compounded daily? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Value today $ 1,034,468.73 What is the value today if the first payment occurs four years from today? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Value today
a. What is the value of an investment that pays $15,000 every other year forever, if the first payment occurs one year from today and the discount rate is 8 percent compounded daily? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the value today if the first payment occurs four years from today? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Value today b. Value today
What is the value today of $4,300 per year, at a discount rate of 10 percent, if the first payment is received 6 years from today and the last payment is received 20 years from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the present value of $2,225 per year, at a discount rate of 9 percent, if the first payment is received 8 years from now and the last payment is received 23 years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the value today of $5,100 per year, at a discount rate of 7.9 percent, if the first payment is received 6 years from today and the last payment is received 20 years from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.., 32.16.) Value today
An investment offers $6,800 per year for 20 years, with the first payment occurring one year from now. a. If the required return is 7 percent, what is the value of the investment today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value today be if the payments occurred for 45 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What would the value today be if the payments occurred for 70 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What would the value today be if the payments occurred forever? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Present value b. Present value C. Present value d. Present value
Suppose an investment will pay $25,000 in 39 years from now. If you can earn 11.05% interest compounded monthly by depositing your money in a bank, how much should you pay for the investment today? Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72.
Suppose you are going to invest $11,000 per year for six years. The appropriate interest rate is 9 percent. What is the future value if the payments are made on the last day of the year? What if the payments are made on the first day of the year? a) $82,756.68; $90,204.78 b) $90,204.78; $82,756.68 c) $49,345.10; $53,786.16 d) $53,786.16; $49,345.10
Suppose an investment will pay $7,000 in 44 years from now. If you can earn 6.15% interest compounded monthly by depositing your money in a bank, how much should you pay for the investment today?Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72. Group of answer choices
If you invest $9,700 per period for the following number of periods, how much would you have received at the end? Use Appendix C. (Round "Factor" to 3 decimal places. Round the final answers to the nearest whole dollar.) a. 11 years at 9 percent Future value $ b. 16 years at 11 percent Future value $ c. 30 periods at 10 percent Future value $
An investment will pay you $4,611.9 in 3 years if you pay $1,376.68 today. What is the implied rate of return? (Convert to a percent. Round to 2 decimal places.)