I need the answer to 5.12. 5.12 Present value: Tracy Chapman is saving to buy a house in five years. She plans to put 20percent down at that time, and she believes that she will need $35,000 for the down payment. IfTracy can invest in a fund that pays 9.25 percent annual interest, compounded quarterly, howmuch will she have to invest today to have enough money for the down payment?5.13 Present value: You want to buy some bonds that will have a value of $1,000 at the end ofseven years. The bonds pay 4.5 percent interest annually. How much should you pay for themtoday?5 14 Present value: Flizabeth Sweenev wants to aCCumulate $12.000 by the end of 12 vears If

Present value is calculated by discounting the future cash flow. Present value = Future value /…

Answered: 5.12 Present value: Tracy Chapman is…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 11E

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pays 8 percent interest. How much will you have in four years? (See Problem 2.) Calculating Present Values Suppose you have just celebrated your 19th birthday. A rich uncle set up a trust fund for you that will pay you $100,000 when you turn 25. If the relevant discount rate is 11 percent, how much is this fund worth today? (See Problem 3.) 4.2 You'uo h0on offered an investment that will double
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?
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?
Manshukh
4. Suppose you make an annual contribution of BD300 each year to a college education fund for a niece. She is 4 years old now, and you will start next year and make the last deposit when she is 18. The fund is a money market account earning 6.5%/year. What will it be worth immediately after the last deposit? You may also set up spreadsheet solution AGE Beginning Balance Ending Balance Deposit Interest
If you were to be promised $10,000 due in one year when interest rates are 5-percent, your investment would be worth…… How much would an investor have to set aside today in order to have $20,000 five years from now if the current rate is 15%? If we deposit $5,000 today in an account paying 10%, how long does it take to grow to $10,000? Bank Beta offers a car loan at 16.25% APR, compounded quarterly. What is the Effective Annual Rate (EAR) on the loan? A savings & loans agency is willing to offer a trader a loan of GH¢1,000 at 3.25% per month for a period of 1 year. What is the EAR
4. Suppose you make an annual contribution of BD100 each year to a college education fund for a niece. She is 4 years old now, and you will start next year and make the last deposit when she is 18. The fund is a money market account earning 6.5%/year. What will it be worth immediately after the last deposit? You may also set up spreadsheet solution
Present value: Tracy Chapman is saving to buy a house in five years. She plans to put 20 percent down at that time, and she believes that she will need $35,000 for the down payment. If Tracy can invest in a fund that pays 9.25 percent annually, how much will she have to invest today? Please use Excel to solve
1. How much would $10,000 due in 100 years be worth today if the discount rate were 9%? 2. You have a chance to buy an annuity that pays $2,000 at the end of each year for 5 years. You could earn 7% on your money in other investments with equal risk. What is the most you should pay for the annuity? 3. You want to buy a condo 5 years from now, and you plan to save $3,000 per year, beginning one year from today. You will deposit the money in an account that pays 8% interest. How much will you have just after you make the 5th deposit, 5 years from now?
You need to have $150,000 in 10 years to buy a house. You already have $70,000. What would be the interest rate you would need?. a. 7.85% b. 7.76% c. 7.92% d. 8.08% e. 8.00%
Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $160,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment? O 2.28% O 2.20% O 2.22% 2.33% 2.59%
3. You will require $700 in 5 years. If you earn 5% interest on your funds, how much will you need to invest today in order to reach your savings goal? (Round your answer to the nearest cent.)

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