3. What is the present value of the following cash flows at an interest rate of 10% per year?a. $100 received five years from now.b. $100 received 60 years from now.C. $100 received each year beginning one year from now and ending 10 years from ow.d. $100 received each year for 10 years beginning now.e. $100 each year beginning one year from now and continuing forever. (Hint: You donot need to use the financial keys of your calculator for this, just some commonsense.)

Annual payment (A) = $100 r = 10%

3. What is the present value of the following cash flows at an interest rate of 10% per year? a. $100 received five years from now. b. $100 received 60 years from now. c. $100 received each year beginning one year from now and ending 10 years from now. d. $100 received each year for 10 years beginning now. e. $100 each year beginning one year from now and continuing forever. (Hint: You do not need to use the financial keys of your calculator for this, just some common sense

3. What is the present value of the following cash flows at an interest rate of 10% per year? a. $100 received five years from now. b. $100 received 60 years from now. c. $100 received each year beginning one year from now and ending 10 years from now. d. $100 received each year for 10 years beginning now. e. $100 each year beginning one year from now and continuing forever. (Hint: You do not need to use the financial keys of your calculator for this, just some common sense

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

1.
Find the P and F values of a certain transaction that has an interest of 12% per year and rate of 10% per payment. Draw the cash flow diagram. 1st year-8th year (respectively): P0, P1000, P1100, P1210, P1331, P1464.10, no payment for 7th year
Solve the following question with complete solution and include cash flow diagram in handwritten ONLY: What is the present equivalent of an annuity of $1860 per year to be received for 15 years starting five years from now when the interest rate is 7% per year compounded bimonthly? (Round off interest rate to 5 decimal places and final answer to 2 decimal)
What is the present value of a perpetual stream of cash flows that pays $70,000 at the end of year one and then grows at a rate of 5% per year indefinitely? The rate of interest used to discount the cash flows is 11%. Question content area bottom Part 1 The present value of the growing perpetuity is $ enter your response here . (Round to the nearest cent.)
Investment X offers to pay you $5,400 per year for 9 years, whereas Investment Y offers to pay you $7,500 per year for 5 years. If the discount rate is 6 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) If the discount rate is 21 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
question 7
1. Consider an annuity that pays £500 at the end of each year for 7 years. The annual effective interest rate is 7% p.a. Compute the present value of this cashflow £ 数字 Enter an answer correct to 2 decimal places Compute the effective duration of this cashflow 数字 Enter an answer correct to 2 decimal places 2. A payment of £60 will be made in 10 years. The annual effective interest rate is 6% p.a. Compute the convexity of this payment 数字 Enter an answer correct to 2 decimal places
What perpetual amount will you receive annually starting next year if you were able to deposit 130,000.00 five years ago at 10.5% interest compounded annually? Calculate it manually and show complete solution with formula used. Provide cash flow diagram. Write it in a paper please. ANS. P 22,487.65
Please answer this question: What is the value at the end of Year 3 of the following cash flow stream if interest is 4% compounded semiannually? (Hint: you can use the EAR and treat the cash flows as an ordinary annuity or use the periodic rate and compound the cash flows individually.) What is the PV? What would be wrong with your answer to parts I(1) and I(2) if you used the nominal rate, 4%, rather than the EAR or the periodic rate, I sow /2=4%/2=2%, to solve the problems?
2. Suppose you expect to receive the following future cash flows at the end of the years indicated: GHC 1800 in year 2, GHC 4200 in year 4, GHC 2,700 in year 5, and GHC 9000 in year 9. If the interest rate is 9% per year, what is the value of the four flows at year 3?
Suppose you would get OMR 5000at the end of 6 years and OMR 6700 at the end of 10 years. Calculate present value of both the cash inflows using 7.05% discount rate. .a 6500. b. 6700 C 671244 d. 2710.40
Investment X offers to pay you $5,300 per year for eight years, whereas Investment Y offers to pay you $7,300 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? If the discount rate is 15 percent?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS