Present value of $500 at 12% nominal rate semiannual compounding, discounted back 5 years. Present Value of Cash Flow: It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

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Answer 1

Question

Chapter 5, Problem 24P

a.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate semiannual compounding, discounted back 5 years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

b.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate, quarterly compounding, and discounted back 5years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

c.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate , monthly compounding, discounted back 1year.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

d.

Summary Introduction

To explain: Reason of difference in present value of part a andb.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

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Leave the above three sub-parts and do d,e,f sub-parts

Find the present value of $700 due in the future under each of these conditions: a. 6% nominal rate, semiannual compounding, discounted back 8 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ b. 6% nominal rate, quarterly compounding, discounted back 8 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. 6% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent. S d. Why do the differences in the PV's occur?

Find the present value of $500 due in the future under each of these conditions: a. 9% nominal rate, semiannual compounding, discounted back 10 years. Do not round Intermediate calculations. Round your answer to the nearest cent. $ b. 9% nominal rate, quarterly compounding, discounted back 10 years. Do not round Intermediate calculations. Round your answer to the nearest cent. $ c. 9% nominal rate, monthly compounding, discounted back 1 year. Do not round Intermediate calculations. Round your answer to the nearest cent. $ d. Why do the differences in the PVS occur? -Select-

Answer 2

Question

Chapter 5, Problem 24P

a.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate semiannual compounding, discounted back 5 years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

b.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate, quarterly compounding, and discounted back 5years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

c.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate , monthly compounding, discounted back 1year.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

d.

Summary Introduction

To explain: Reason of difference in present value of part a andb.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

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Answer 3

Question

Chapter 5, Problem 24P

a.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate semiannual compounding, discounted back 5 years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

b.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate, quarterly compounding, and discounted back 5years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

c.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate , monthly compounding, discounted back 1year.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

d.

Summary Introduction

To explain: Reason of difference in present value of part a andb.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

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Answer 4

Question

Chapter 5, Problem 24P

a.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate semiannual compounding, discounted back 5 years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

b.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate, quarterly compounding, and discounted back 5years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

c.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate , monthly compounding, discounted back 1year.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

d.

Summary Introduction

To explain: Reason of difference in present value of part a andb.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

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Answer 5

Chapter 5, Problem 24P

a.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate semiannual compounding, discounted back 5 years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

b.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate, quarterly compounding, and discounted back 5years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

c.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate , monthly compounding, discounted back 1year.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

d.

Summary Introduction

To explain: Reason of difference in present value of part a andb.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Answer 6

Chapter 5, Problem 24P

a.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate semiannual compounding, discounted back 5 years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Answer 7

Chapter 5, Problem 24P

a.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate semiannual compounding, discounted back 5 years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Answer 8

b.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate, quarterly compounding, and discounted back 5years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Answer 9

b.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate, quarterly compounding, and discounted back 5years.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Answer 10

c.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate , monthly compounding, discounted back 1year.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Answer 11

c.

Summary Introduction

To compute: Present value of $500 at 12% nominal rate , monthly compounding, discounted back 1year.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money thatis invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Answer 12

d.

Summary Introduction

To explain: Reason of difference in present value of part a andb.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Answer 13

d.

Summary Introduction

To explain: Reason of difference in present value of part a andb.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Answer 14

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Answer 15

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Answer 17

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Solution Summary: The author calculates the present value of 500 at 12% nominal rate semiannual compounding, discounted back 5 years.

Concept explainers

To explain: Reason of difference in present value of part a andb.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Want to see the full answer?

Chapter 5 Solutions

Solution Summary: The author calculates the present value of 500 at 12% nominal rate semiannual compounding, discounted back 5 years.

Concept explainers

To explain: Reason of difference in present value of part a andb. Present Value of Cash Flow: It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.

Want to see the full answer?

Chapter 5 Solutions

To explain: Reason of difference in present value of part a andb.

Present Value of Cash Flow:

It is also called as discounted value; it defines that amount of money that is invested at a given rate of interest will increases to the amount of future cash flow at that particular time in the future.