5. An engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last 4 years. What does he have to pay at the end of the fifth year in order to pay off his loan? d) P 6,922.93 a) P 6,999.39 b) P 6,292.93 c) P 6,222.39
5. An engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last 4 years. What does he have to pay at the end of the fifth year in order to pay off his loan? d) P 6,922.93 a) P 6,999.39 b) P 6,292.93 c) P 6,222.39
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Q 5 please
![Choose the correct answers for the following questions:
1. What is the annual equivalent interest rate of a cash flow of $500 received now, with a
present worth of $386.47 at an interest rate of 10% per year?
a) 5%
b) 10%
c) 7.6931%
d) 15%
2. You expect to deposit the following cash flows at the end of years 1 through 5, ($1,000;
$4,000; $9,000; $5,000; and $2,000) respectively. Alternatively, you could deposit a single
amount today at the beginning of year 1 (end of year 0). How large does the single deposit
need to be today if you can earn 10% compounded annually? Hint: the present value today
(t-0) is identical to the single cash flow amount.
a) $15,633.62
b) $21,000.00
c) $25,178.10
d) $27,695.91
3. What is the annual equivalent rate of an investment that pays 5% semi-annually?
a) 5.25%
b) 5.00%
c) 4.75%
d) 5.50%
4. What is the present worth of a project that has an initial investment of $50,000 and
generates annual cash inflows of $10,000 for 10 years, with a discount rate of 8%?
b) $46,881
a) $429,907
c) $55,398
d) $82,500
5. An engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last
4 years. What does he have to pay at the end of the fifth year in order to pay off his loan?
a) P 6,999.39
b) P 6,292.93
c) P 6,222.39
d) P 6,922.93](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9bd1feb0-2daf-4277-a395-6f1a77fd1eba%2F00a94777-2aee-4ce7-b801-75935ec41b5e%2F6pdmo5d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Choose the correct answers for the following questions:
1. What is the annual equivalent interest rate of a cash flow of $500 received now, with a
present worth of $386.47 at an interest rate of 10% per year?
a) 5%
b) 10%
c) 7.6931%
d) 15%
2. You expect to deposit the following cash flows at the end of years 1 through 5, ($1,000;
$4,000; $9,000; $5,000; and $2,000) respectively. Alternatively, you could deposit a single
amount today at the beginning of year 1 (end of year 0). How large does the single deposit
need to be today if you can earn 10% compounded annually? Hint: the present value today
(t-0) is identical to the single cash flow amount.
a) $15,633.62
b) $21,000.00
c) $25,178.10
d) $27,695.91
3. What is the annual equivalent rate of an investment that pays 5% semi-annually?
a) 5.25%
b) 5.00%
c) 4.75%
d) 5.50%
4. What is the present worth of a project that has an initial investment of $50,000 and
generates annual cash inflows of $10,000 for 10 years, with a discount rate of 8%?
b) $46,881
a) $429,907
c) $55,398
d) $82,500
5. An engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last
4 years. What does he have to pay at the end of the fifth year in order to pay off his loan?
a) P 6,999.39
b) P 6,292.93
c) P 6,222.39
d) P 6,922.93
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