You deposit $100 at the end of each month in a bank account that earns 6% interest compounded monthly what will the balance be after five years
Q: The risk-free rate of return is 4.4 percent and the market risk premium is 14 percent. What is the…
A: Solution:- Capital Asset Pricing Model (CAPM) is an equity model which calculates the required rate…
Q: Assume that a company issued a bond with $1,000 face value, 10% coupon rate, 20 years maturity, if…
A: Data given: Face value=$1000 Coupon rate=10% N=20 years Yield to maturity=8% Working Note #1…
Q: The risk free rate is 1.9%. If the market portfolio has a mean return of 8.7%, what is the slope of…
A: Security market line is the representation of capital assets pricing model which gives the risk…
Q: urn on Hilo stock is 15.05 percent while the expected return on the market is 13.3 percent. The…
A: The CAPM capital assets pricing model gives the required rate of return of the stock based on the…
Q: Here and Gone, Inc., has sales of $21,332,097, total assets of $12,393,090, and total debt of…
A: Profitability ratio shows the ability of the company to generate income relative to its revenue,…
Q: The present value of a 6-year annuity is X. The annuity pays 5 at the end of the first month, 10 at…
A: Annuity are a series of payments being made at a regular period. Growing annuity with arithmetic…
Q: ). At a certain interest rate the present values of the following two payment patterns are equal:…
A: Present value is the equivalent amount of money today required that is to be paid in future based on…
Q: Why doesn’t an issuer of an asset-backed security seek the highest credit rating of triple A?
A: Asset-backed securities (ABSs) are financial instruments that are supported by revenue assets…
Q: Please give me simply explaination why people said that "Only options writer requires to maintain…
A: The option is reflective of derivative contract which is providing with a right to either buy or…
Q: (Complex present value) How much do you have to deposit today so that beginning 15 years from now…
A: The PV of future cash flows is used to find out the total actual worth of the cash flows after they…
Q: If the present value of an ordinary, 8-year annuity is $6,100 and interest rates are 8.0 percent,…
A: Present value of ordinary annuity = $6,100 Interest rate = 0.08 Present value of annuity due = ?
Q: Shelby's student loan of $25,500 at 3.32% compounded quarterly was amortized over 6 years with…
A: Loans are paid by montly payments and these are fixed payments and these payments carry the payment…
Q: A project has annual NPV break-even level of sales of $3,000,000. The annual net cash flows can be…
A: NPV means net present value. It is the sum of all present values of future cash flows.
Q: CanPro Co. is expecting that its dividend for this coming year will be $1.2 a share and that all…
A: Dividend is $1.2 Stock Price is $17 Growth rate is 3% Required return = Dividend×1+Growth rateStock…
Q: If a bank's shares are trading at a price to historic book value of less than 1, which of the…
A: Prices of shares have market value and book value. Book value of shares are based on the book value…
Q: vestor has R50,000 to invest A, B and C. R12,000 will be invested into asset A. The beta for asset A…
A: Beta of portfolio is the weighted beta of individual beta of the stocks in the portfolio and beta…
Q: Question 75 Which of the following is NOT a required feature of an object that could qualify as…
A: Solution:- Money is the medium of exchange issued by the central bank of a country which serves as…
Q: Bill formed his optimal complete portfolio worth $1000 out of 2 assets: A T-bill with a return of…
A: Optimal risky portfolio is the portfolio which lies at the tangent line of the efficient frontier.…
Q: Suppose it is Jan 1st, and the futures price for August 1st delivery of a 1-year zero-coupon…
A: A bank has taken a position in the futures contract of a 1-year zero-coupon government T-bill. Based…
Q: Q 2 To borrow $750, you are offered an add on interest loan at 9.1 percent with 12 monthly…
A: We need to use add on method, in which total interest paid over tenure of loan is calculated using…
Q: A project has the following cash flow Year Cash flow 0 -10600 1…
A: MIRR refers to modified internal rate of return. The objective of MIRR is to overcome the…
Q: The risk free rate is 9.5%. If the market portfolio has a mean return of 6.6%, what security market…
A: The capital assets pricing model has been represented by the SML line which gives you required rate…
Q: SDJ, Inc., has net working capital of $1,896, current liabilities of $9,155, and inventory of…
A: Net working capital =$1,896 Current liabilities = $9,155 Inventory = $1,223
Q: Miles is 33 years old and single his only income consisted Of 10,500 in wages. What is the maximum…
A: The maximum amount an individual contribute under traditional IRA for the tax year 2020 is $6,000…
Q: A stock has an expected return of 10.2 percent. The expected return on the market is 9 percent and…
A: Expected Return = Risk Free Rate +Beta ×Market Return-Risk Free Rate Expected Return is 10.2% Market…
Q: The investor has R50,000 to invest A, B and C. R12,000 will be invested into asset A. The beta for…
A: The beta of the market is exactly equal 1 because it is the index against which all the other stocks…
Q: Assume that you need $1,000 four years from today. Your bank compounds interest at an 8 percent…
A: Future Value $1,000.00 Interest Rate 8%
Q: Based on the following stock price and shares outstanding information, compute the beginning and…
A: The Information we have is as follows -
Q: Last year Daniel bought 100 shares of Texas Corporation common stock for R53 per share. During the…
A: The total return on the common stock is the total of dividend and capital gains.
Q: der the information for assets A, B, and C below: State Boom Average Bust Probability 0.2 0.4 0.4…
A: Portfolio is the combination of the stocks and return on portfolio depends on the stocks in the…
Q: A monthly deposit of $300 is put into an account earning 5% interest compounded monthly. Round to…
A: Solution:- When an equal amount is depsited each period at end of period, it is called ordinary…
Q: Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this,…
A: The cash flows indicate the inflows and outflows of cash. Cash flows are critical to the company's…
Q: A real estate investor has the opportunity to purchase land currently zoned as residential. If the…
A: The probability (P) of approval is 50%. The given profits under the alternative of Purchase (d1) for…
Q: Ranking conflicts (or conflicts in project choice) can arise between IRR and NPV decision rules when…
A: IRR is the actual rate of return expected from the investment or project. Whereas the NPV means the…
Q: Rachel purchased a car for $22,000 three years ago using a 4-year loan with an interest rate of 10.8…
A: The concept of time value of money will be used here. We will have to determine the monthly payments…
Q: You build a portfolio containing stocks ?A and ?B only and you have shorted ?B such that its…
A: Expected return of the portfolio means the mean of the probability distribution of investment…
Q: 8. How much should Liz invest at 9% per year, compounded quarterly, so that she will have $10,000 at…
A: The compounding interest rate results in more interest earning, for example, the bank offers…
Q: Which of the following statements(s) is (are) true regarding preferred stock? a. Preferred stock…
A: Preferred stock refers to the stock who are issued at the par value and dividend are to be paid on…
Q: SDJ, Inc., has net working capital of $1,175, current liabilities of $6,981, and inventory of…
A: Net working capital = $1,175 Current liabilities = $6,981 Inventory = $1,092
Q: alculate the value of a R1,000 bond which has 10 years until maturity and pays quarterly interest at…
A: Price of bond is the present value of coupon payment and plus present value of face value of bond…
Q: The following is the information on common stock issued by Huntington Power Co. Calculate the cost…
A: Dividend discount model will be used here. As per the dividend discount model the value of stock…
Q: Usir
A: Given Stock Price S = 44, Strike Price x = 31.98, Rf = Risk-free rate of return, =7.7%,=0.077Time…
Q: You are a trader for GreekLetters Ltd. You have sold 100,000 put options on a stock at strike $24.5…
A: We can make the portfolio delta neutral by combining some stocks with the portfolio. Before that we…
Q: Q 17 You invested $2,000 in the stock market one year ago. Today, the investment is valued at…
A: Solution:- Rate of return means the percentage of income earned to the initial investment made. So,…
Q: DR 1 Future Value 2 Interest Rate 3 Part a 4 Present Value 5 Part b Payment 7 Part c 8 Future Value…
A: You have a very specific doubt about an input used in calculation of PV and FV. We need to…
Q: (Related to Checkpoint 11.4) (IRR calculation) What is the internal rate of return for the following…
A: The IRR is the actual rate of return expected from the investment or project. The IRR calculation is…
Q: A young couple wants to have a college fund that will pay $40,000 at the end of each half-year for 8…
A: Investment refers to the financial asset that is being invested for generating income further in the…
Q: Find the accumulated future value of a 17-year $200,000 continuous inco compounded continuously at…
A: Future value is the amount that is being deposited over the period of time and amount of interest…
Q: The firm can sell 8% preferred stock at its R80 per share par value. Assume that the par value…
A: Annual dividend (d) = $6.4 (i.e. R80 * 0.08) Current price (P0) = R80 Issuing and selling costs (C)…
Q: ABC company borrows $300,000 at 7.4% compounded monthly. The loan is due in 10 years. How much…
A: Compounded amount is the value determined where the interest earned on the loan also earns interest.…
Step by step
Solved in 2 steps
- You put $600 in the bank for 3 years at 15%. 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 third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.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.You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
- Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
- You plan to deposit $500 in a bank account now and $600 at the end of the year. If the account earns7% interest per year, what will be the balance in the account right after you make the second deposit?You deposit $10,000 in a bank that pays an annual interest rate of 6% compounded quarterly how much would your balance be after five years?Each day, you deposit $4.79 into a bank account whose annual rate is 1.6% with daily compounding. How much interest will you have earned after 16 years? Round your answer to the nearest dollar
- Your bank account pays a nominal interest rate of 8%, compounded quarterly. You deposit $500 in the account today, and deposit $1,000 in the account at the end of the first year. How much will you have in the account at the end of the first year?you deposit $9000 into a bank account that pays 3.15% annual interest, compound quarterly. How much interest does the account earn after 5 years?You deposit $700 at the end of each month into an account earning interest at an annual rate of r compounded monthly. Use a spreadsheet to find the value of r that produces an account value of $50,000 in 5 years.