A cash flow at time zero (now) of $14,551 is equivalent to another cash flow that is an EOY annuity of $2,700 over seven years (starting at year 1). Each ofthese two cash-flow series is equivalent to a third series, which is a uniform gradient series. What is the value of G for this third series over the sameseven-year time interval? Assume that the cash flow at the end of year one is zero......Choose the correct answer below.A. $989B. $785C. $392D. $1,450O E. Not enough information given.

A Cash flow at time zero (but now it is $14,551) is equivalent to another cash flow that is an…

Answered: A cash flow at time zero (now) of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Your sister needs money and comes to you with a deal. She asks you to pay $2,000 at the end the first year, then increasing by $500 every year til the 20th year. Then, for the next 20 years, she will pay you back twice the amount you paid for each of your annual payments, starting the next year right after you pay your last payment. Thus, you receive $4,000 at the end of year 21 and $5,000 at the end of next year and so on. Your sister claims it is beneficial for you to accept this deal since you are getting back twice the amount you let her borrow. Draw the Cash Flow Diagram What is the interest rate that makes you just indifferent between accepting or rejecting her deal? Assume your 1) your TVOM is 5%, 2) you decided to lend the amount asked by your sister. How many times of your original payment should you ask her for (Currently she's giving you back double the amount you paid) if you want to earn $25,000 profit now? First calculate the present worth of the given cash flow at time…
Suppose that an investor wishes to deposit an amount now so that in 30 years $1,000,000 will be in an account that pays 10% interest per year, compounded annually. What amount must be deposited now?
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Please answer using Annuity Formula. Step by step. Thank you.
follow instructions. don't forget to make the diagram
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If Phil borrows $25,000 from a loan company at an interest rate of 3.5% per year compounded weekly, and plans to make a payment of $850 per quarter, how may years will it take him to pay off the loan?If Phil borrows $25,000 from a loan company at an interest rate of 3.5% per year compounded weekly, and plans to make a payment of $850 per quarter, how may years will it take him to pay off the loan?
If a nominal interest rate of 8% is compounded continuously, determine the unknown quantity in each of the following situations: a. What uniform EOY amount for 11 years is equivalent to $9,000 at EOY 11? b. What is the present equivalent value of $950 per year for 13 years? c. What is the future equivalent at the end of the sixth year of $232 payments made every six months during the six years? The first payment occurs six months from the present and the last occurs at the end of the sixth year. d. Find the equivalent lump-sum amount at EOY nine when P = $900. Click the icon to view the interest and annuity table for continuous compounding when i = 8% per year. a. The uniform EOY amount is $ (Round to the nearest dollar.) b. The present equivalent value $950 per year for 13 years is $ c. The future equivalent is $ (Round to the nearest dollar.) d. The equivalent lump-sum amount is (Round to the nearest dollar.) (Round to the nearest dollar.)
Lindsey plans to deposit her annual bonus into a savings account that pays 3% interest compounded annually. The size of her bonus increases by $1000 each year, and the initial bonus amount she will deposit at the end of year 1 is $2,500. a) Determine how much will be in the account immediately after the 6th deposit. b) What's the future value if she only plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8)? c) What's the future value if she only plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8), but also plans to skip the deposits at the end of years 3 and 6?
A cash flow at time zero (now) of $7,386 is equivalent to another cash flow that is an EOY annuity of $2,100 over five years (starting at year 1). Each of these two cash-flow series is equivalent to a third series, which is a uniform gradient series. What is the value of G for this third series over the same five-year time interval? Assume that the cash flow at the end of year one is zero. Choose the correct answer below. A. $1,050 B. $702 OC. $949 OD. $1,195 OE. Not enough information given.
A geometric gradient that increases at f= 5% per year for 15 years is shown in the accompanying diagram. The annual interest rate is 10%. What is the present equivalent value of this gradient? AClick the icon to view the diagram for geometric gradient values. Click the icon to view the interest and annuity table for discrete compounding when i= 5 % per year. Click the icon to view the interest and annuity table for discrete compounding when i= 10% per year. 4... The present equivalent value of the gradient is $ (Round to the nearest dollar.)
K How much money should be deposited annually in a bank account for five years if you wish to withdraw $6,000 each year for three years, beginning five years after the last deposit? The interest rate is 2% per year. Click the icon to view the interest and annuity table for discrete compounding when i=2% per year. The annual deposit amount should equal $ per year. (Round to the nearest dollar.)

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