A bank makes a 30 year Fully Amortizing FRM for $2,000,000 at an annual interest rate of 4.125% compounded monthly, with monthly payments.Suppose inflation is 2% per year, compounded monthly. What is the real value of the 20th payment? O A. $9,375.48 B. $9,050.06 OC $9,692.99 OD. $6,523.11

Q: Your bank pays 8% interest, compounded semiannually. Use Table 12-1 to find the future value (in $)…

A: A sum of money is worth more now than it will be at a later time due to its potential for profits in…

Q: A debt of $1908 with interest at 6.3% compounded annually is to be repaid by equal payments at the…

A: Solution:- When a loan is taken, it is to be repaid in lump sum or in installments. If it is paid in…

Q: 800

A: Formula to calculate the future value of ordinary annuity is: FV = C*[(1+I)^n - 1/i] Where C is the…

Q: What is the present value of a stream of $800 cash payments, each to be made at the end of the next…

A: Given:

Q: On April 28, 2020 a sum of $39,700.00 was deposited into an account. What would be the future value…

A: Future value of money includes the amount of deposit done and amount of interest accumulated over…

Q: f K40, 000 is deposited at the end of each half year in an account that earns 6.2%  compounded…

A: Comment - Multiple Questions Asked Interest  It is the amount that the borrower must pay in order to…

Q: What will a deposit of $2500 at 7.8% compounded semiannually be worth if left in the bank for six…

A: Formula for Future Value FV=PVx(1+r/2)nxt Where, FV = Future Value PV = Present Value r = rate of…

Q: Please break down step by step how the circled figure was calculated. How did they get 6.41766?…

A: It refers to the current worth or value of a sum of money to be received or paid in the future,…

Q: Your bank pays 4% interest, compounded semiannually. Use Table 12-1 to find the future value (in $)…

A: Future value of annuity due factor (r, n) = Future value of ordinary annuity factor (r, n) * (1+r) r…

Q: Suppose that ​$290,000.00 is owed on a house. The monthly payment for principal and interest at 8.0%…

A: The amount paid by the borrower on the amount owed is regarded as interest rate.

Q: 6.​If the current value of $1000 received five years from now is $680.50, what is the ​assumed…

A: Annual interest rate refers to the rate that is being charged by the lender by the borrower on the…

Q: If for the next 30 years you place $2,000 in equal year-end-deposits into an account earning 5% per…

A: Future Value of Ordinary Annuity refers to the concept which gives out the compounded or future…

Q: Gary King will deposit $27500 into an account today that earns 13% per year compounded annually.…

A: Given information: Principle amount = $27,500 Rate of interest = 13% Period = 5 years

Q: 4. find the periodic payemnt R required to amortize a loan of P dollars over T years with interest…

A: The periodic payment is made at regular intervals and the amount of period payment for each period…

Q: Suppose you invest $3,800 today in an account that earns a nominal annual rate (inom) of 12 percent,…

A: Compound = Quarterly = 4Present Value = pv = $3800Interest rate = r = 12 / 4 = 3%Time = t = 12 * 4 =…

Q: What amount must be deposited at the bank today to grow to $600 in 4 years, assuming 10% interest…

A: Amount means the sum to be received after few year with interest. Principal means the sum to be…

Q: If you deposit $500 every 6 months for 7 years at an interest rate 20% compounded quarterly, how…

A: The amount at the end of 7 years is the future value of the semiannual deposits.

Q: How much more is a perpetuity of $6,000 worth than an annuity of the same amount for 10 years?…

A: Annuity is a series of payments made at equal intervals of time. Perpetuity is an annuity having…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.