Answered: 8. Determine the future value at the…

8. Determine the future value at the end of two years of an investment of OMR3,000 made now and an additional OMR3,000 made one year from now if the compound annual interest rate is 4 percen

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 15PROB

See similar textbooks

Related questions

Q: Suppose an investment earns 2.5% interest compounded continuously. Find the future value of a $3400…

A: Present value is an estimate of the present value of future cash values that may be received at a…

Q: What is the present value of 10 equal payments of $16,500 to be made at the end of each year for the…

A: Present value of equal payments = equal payments x PVIAF (10%, 10 years)

Q: 6) What is the future value (FV) of $20,000 in four years, assuming the interest rate is 4% per…

A: Given, PV of amount is $20000 rate is 4% term is 4 years

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: The objective of the question is to find the present value (PV) of an annuity account that is…

Q: A. Assume that you have $7500 to invest. You plan to invest it for 10 years at a rate of 7% per…

A: Future Value = Present Value * (1 + Interest Rate)^Time

Q: 8) Suppose an investment of $5.750.00 paying 6.5% nominal rate compounded semi-annually has a term…

A: Compound interest refers to an amount that is to be paid in addition with the principal amount or…

Q: Find the present value of the given future amount. $70,093 for 324 days at 6.4% simple interest.…

A: Intreast rate for 324 Days =6.4×324÷360=5.76% Future value =70,093

Q: What is the equivalent present value of the following series of payments: $10,000 the first year,…

A: Calculate the equivalent present value as follows:

Q: Classify the financial problem. Assume a 9% interest rate compounded annually. Deposit $200 at the…

A: Solution:- When an equal amount is deposited each year, it is called annuity. The accumulated value…

Q: Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated…

A: To calculate the present value we will use the below formula Present value = FV/(1-d)n Where FV -…

Q: What is the future value of $12,000 after 5 years if the appropriate interest rate is 6%, compounded…

A: Amount = $12,000 Years = 5 Terms = 2*5 = 10 semi-annual terms Interest rate(r) = 6%/2 = 3%…

Q: Find the present values of these annuities due. a. What is the present value of $4,000 per month…

A: PMT=$4000 per monthNumber of payments=n=12Interest rate=4.8%Monthly interest rate=r=4.8/12=0.4%Find…

Q: Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated…

A: Present value is the value of an investment that is in today’s term. It helps to make decisions…

Q: A one-year investment is certain to pay £650. If the annual interest rate is 6%. * Round your…

A: Present Value refers to the method or technique which calculates the value of cash flows today,…

Q: What is the future value of a stream of $800 annual payments worth to the investor at the end of 10…

A: The FV of an investment refers to the cumulative worth of the investment's cash flows at a future…

Q: Find the present value of a simple perpetuity of P10,000 payable semi-annually if the interest rate…

A: The formula to calculate the present value of the growing annuity is Present value of annuity due=…

Q: 2. A payment of £30 will be made in 10 years. The annual effective interest rate is 7 % p.a. Compute…

A: payment = p = £30 Time = t = 10 years Interest rate = r = 7%

Q: What is the maximum amount you should pay today for an investment that pays a single future cash…

A: Future cash flow (FV) = $25000 Interest rate = 2% Semi annual interest rate (r) = 2%/2 = 1% Period =…

Q: What is the present value (PV) of an investment that pays $200,000 every year (end - of - every…

A: Here,AnnuityPayment is $200,000Interest Rate is 5%Compounding Period is Quarterly i.eTime Period of…

Q: Use the RSTUV method to obtain the solution. If P dollars are invested at r percent compounded…

A: Given, A = P*(1+r)^2

Q: At a certain ratr of compound interest i an investment of 10,000 will grow to 15,000 at the end of…

A: Future Value = Present Value (1 + r)n where r = interest rate n = time period 15,000 = 10,000 * (1 +…

Q: 9. Assuming an interest rate of 10% calculate the present value of the following streams of yearly…

A: Present value refers to the current value of an asset present at some future date. It is helpful for…

Q: An investment pays you $1000 at the end of each of the next 3 years. The investment will then pay…

A: Interest rate = 8% Calculation of present value Year Cash inflow PVF(8%,Year) Present value A…

Q: What is the future value in 2 years if you invest $100 at the beginning of each month for 12 months…

A: Future value of money includes the amount of deposit being made and the amount of compounded…

Q: If $2, 000 is invested for two years after which it grows to a value of $2112.40. What is the…

A: Investment amount (PV) = $2,000Investment future value = $2,112.40Number of years = 2 years

Q: Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated…

A: Future compounded amount(A)=PV1+rnnt

Q: An investment pays $1000 in two years and $3000 at the end of the fifth year. It is priced to yield…

A: Given: The investment gives 1000 in two years means 1000 in year1, 1000 in year2 and 3000 at the…

Q: You make an investment into a money market account at time T=0. In year T=5, the value of the money…

A: Given: Time period: 5 years Future value: $5000 Rate of interest: 5% compounded quarterly To…

Q: ). At a certain interest rate the present values of the following two payment patterns are equal:…

A: The concept of the time value of money states that money if invested earns interest and if left idle…

Q: Find the future value of a $2500 investment if the interest rate is 0.25% compounded monthly for…

A: The given details are:Investment made: $2,500Interest rate: 8.25% p.a., compounded monthlyTotal…

Q: Find the present value of the given future amount. $183,714 for 321 days at 5.6% simple interest.…

A: The simple interest is interest without compounding that means there is no interest on interest and…

Q: If the annual interest rate is 3 percent, how long would you have to wait before a $24,000…

A: Future Value = Present Value *(1 + Interest rate)time period

Q: What is the present value of an investment that will pay $1,000 in one year's time, and $1,000 every…

A: Calculation of Present value of perpetuity:Answer:The present value of the investment is $12,500

Q: Determine the future value at the end of each year of the following series of payment at 5% rate of…

A: Future value is the value of present amount of money after a certain time period at a specific rate…

Question

8. Determine the future value at the end of two years of an investment of OMR3,000 made now and an additional OMR3,000 made one year from now if the compound annual interest rate is 4 percent.

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

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
If the current rate of interest is 5%, then the future value (FV) of an investment that pays $1,000 per year and lasts 15 years is closest to: A. $12,947 B. $25,895 C. $21,579 D. $30,211
8) Suppose an investment of $5.750.00 paying 6.5% nominal rate compounded semi-annually has a term of 5 years. Find the compound interest.
Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated interest rate after the stated amount of time. (Round your answer to the nearest cent.) 6 years, at 5.4% per year, compounded quarterly PV = $
Calculate, to the nearest cent, the future value FV (in dollars) of an investment of $10,000 at the stated interest rate after the stated amount of time. 2% per year, compounded annually, after 13 years FV = $
What is the future value in 12 years of $1,000 payments received at the beginning of each year for the next 10 years? Assume an interest rate of 5%
What is the future value in 10 years of 1500 payments received at the end of each year for tge next 10 years? assume an interest rate of 8%
Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated interest rate after the stated amount of time. (Round your answer to the nearest cent.) 14 years, at 3.1% per year, compounded quarterly
Calculate, to the nearest cent, the future value FV (in dollars) of an investment of $10,000 at the stated interest rate after the stated amount of time. 1% per year, compounded annually, after 14 years
19. Find the Macaulay and Modified durations of an investment that pays $2,000 at the end of year 2 and $3,000 at the end of year 5. Assume a level annual effective interest rate of i = 3%. Be sure to use the correct units for each answer.
If the interest rate is 3 percent then what is the present value of $8,198 to be received in 6 years ?
Calculate, to the nearest cent, the future value FV (in dollars) of an investment of $10,000 at the stated interest rate after the stated amount of time.0.5% per month, compounded monthly, after 21 years