A company has to replace a present facility after 15 years at an outlay of ETB. 5,00,000. It plans to deposit an equal amount at the end of every year for the next 15 years at an interest rate of 18% compounded annually. Find the equivalent amount that must be deposited at the end of every year for the next 15 years. the the on

A company has to replace a present facility after 15 years at an outlay of ETB. 5,00,000. It plans to deposit an equal amount at the end of every year for the next 15 years at an interest rate of 18% compounded annually. Find the equivalent amount that must be deposited at the end of every year for the next 15 years. the the on

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: A company wants to have $50,000 at the beginning of each 6-month period for the next 4.5 years. If…

A: Final amount = $50,000Time = 4.5 years Rate = 6.23% compounded semi-annually

Q: A company is considering investing in a project that requires a capital investment of $23,771 and is…

A: Net present value (NPV): Net present value is defined as the summation of the present value of cash…

Q: A 20 year loan of $100, 000 at i = 6% is paid off by paying 125% of each year’s interest at the end…

A: Term of Loan20yearsLoan amount100000Interest rate6%

Q: The ABC Company has contracted to make the following payments: 500,000 immediately; 50,000 at the…

A: Year Cash flow PV 8% Present value 0 500,000 1.4693 734664 1 50,000 1.3604 68024.45 2…

Q: A company wants to accumulate a sum of money to repay certain debts due in the future. The company…

A: To calculate the future value of a series of cash flows, you can use the future value of an annuity…

Q: GHA Co. made an investment of $10,000 and from this it will receive $800 annually for the next 18…

A: The present value of the annuity factor is used when there is an equal series of cash flows and the…

Q: A company will receive payments of $8,000 per year for the next five years under a subscription…

A: In accordance with generally accepted accounting principles (GAAP), the company should record the…

Q: engineering company expects to expand its plant facilities in 6 years at an estimated cost of…

A: a) Solved using Financial Calculator N = 6 years * 4 = 24 I/Y = 10%/4 = 2.5% FV = 68,000 CPT PMT =…

Q: machine selling for $10000 may be purchase by paying a $1000 deposit and the balance in equal…

A: in this problem we have to calculate present value FACTOR and from that we can get monthly payments.

Q: To finance the development of a new product, a company borrowed $29,000 at 7% compounded monthly. If…

A: Compound Interest The type of interest that helps build wealth quickly is called compounding.…

Q: Jane Doe plans to make twelve end-of-month payments of $18,000 each on a short term investment…

A: The time value of money (TVM) is a financial concept that recognizes the idea that money has a…

Q: A company wants to have $40,000 at the beginning of each 6-month period for the next 4.5 years. If…

A: The given problem is on Annuity due Annuity due is an annuity whose payment is due immediately at…

Q: A company wants to have $50,000 at the beginning of each 6-month period for the next 4+1/2 years. If…

A: Final amount = $50,000Time = 4.5 years Rate = 6.23% compounded semi-annually

Q: A $15,000 investment will be allowed to grow at 5.5% compounded semiannually until it can support…

Q: Ferris Bueller has borrowed from the Ferrari Bank at a rate of 7% and will repay the laon with…

A: The current worth of the cash flows or an asset after discounting is termed as the present value.

Q: A person is considering entering into an agreement with an investment company to deposit $1000 into…

A: The FV of an investment refers to the combined worth of the cash flows of the investment at a…

Q: A manufacturer needs to borrow money to purchase a building. The purchase price of the building is…

A: GIVEN, PRICE = $1.5 MILLION = 1500,000 DOWNPAYMENT = $300,000 LOAN AMOUNT = 1200,000 ( 1500,000 -…

Question

4. A company has to replace a present facility after 15 years at an outlay of ETB. 5,00,000.
It plans to deposit an equal amount at the end of every year for the next 15 years at an
interest rate of 18% compounded annually. Find the equivalent amount that must be
deposited at the end of every year for the next 15 years.
ltinthe e
theX
tlon
An investment of

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 by step

Solved in 2 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

A demand loan of $5000.00 is repaid by payments of $2500.00 after two years, $2500.00 after four years, and a final payment after six years. Interest is 99% compounded quarterly for the first two years, 10% compounded monthly for the next two years, and 10% compounded annually thereafter. What is the size of the final payment? The final payment is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Bank A pays 6% simple interest annually on its investment accounts. If Bank B pays interest on its account compounded semiannually, what is the annual percentage rate (APR) should the bank set if it wants to match Bank A over an investment horizon of 10 years?
A firm has decided to make an investment, an ordinary annuity of $10,000 per year for fifteen years. Calculate the future value of the investment at the end of fifteen years, given the firm earns 4% annual interest.
a demand loan of 7000$is repaid by payments of 3500$ after two years, 3500$ after four years and a funal payment after seven years. interfest rate is 9% compunded quarterly for the first two years, 10% compoiunded annuannly for the next two years, and 10% compounded mointhly thereafter. what is the size of the final payment?
Consider a floor that has a principal amount of $10 million. The tenor is 3 months, the life of the floor is 5 years, and the floor rate is 5% (compounded quarterly). On a reset date, 3- month LIBOR is 4.2% per annum. What payment will the holder of the floor receive?
Please step by step solltion
Webster Mining is considering the purchase of a new sorting machine. The quote consists of quarterly payments of $17,000 for 8 years at an annual interest rate of 6% (APR with quarterly compounding). If the first payment begins one quarter after date of purchase. What is the purchase price of the equipment?
A company plans on purchasing a new piece of equipment in six years. The equipment is expected to cost $200,000. In planning for this purchase, the company will deposit an amount of money into an investment account earning 8% compounded annually. Using an 8% interest rate, the implied annual interest is $200,000 x 0.08 = $16,000. The following information is given: Assuming an annual interest rate of 8% for six years is appropriate, the present value of the deposit is $200,000 x 0.63017 = $126,034. Assuming an annual interest rate of 8% for eight years is appropriate, the present value of the deposit is $200,000 x 0.54027 = $108,054. Assuming an annual interest rate of 6% for eight years is appropriate, the present value of the deposit is $200,000 x 0.62741 = $125,482. How much does this company need to deposit today? $108,054 $126,034 $125,482 $104,000
A company buys a machine for $18,000, which it agrees to pay for in five equal annual payments, beginning one year after the date of purchase, at an annual interest rate of 7%. Immediately after the second payment, the terms of the agreement are changed to allow the balance due to be paid off in a single payment the next year. What is the final single payment? Solution: 1. Draw the CFD by yourself; 2. First, calculate annual payment amount for the first 2 years: O A= + 7%, • )=18000x =$ o The final payment is the • worth of the : unpaid payments. 3. Second, Calculate the single payment amount due at the end of the 3rd year: F=S
(Related to Checkpoint 6.1) (Annuity payments) A firm borrows $20,000 from the bank at 13 percent compounded annually to purchase some new machinery This loan is to be repaid in equal anno instaliments at the end of each year over the next 13 years. How much will each annual payment be? The amount of each annual payment will be $ (Round to the nearest cont)
A new hotel built in Banff cost $56 million to build. The owner's financing arrangements allow for quarterly payments at 8.2% compounded semi-annually over the next 20 years. The first payment is to be made today. a. What is the amount of the final payment? Number b. Calculate the principal and interest portions of the payments in the final five years. Principal (PRN) = Number Interest (INT) = Number
HY Industries Ltd. plans to replace a warehouse in eleven years at an anticipated cost of $55,000. To pay for the replacement, a sinking fund has been established into which equal payments are made at the end of every quarter. Interest is 7.5% quarterly. (a) What is the size of the periodic payment? (b) What is the accumulated balance just after the 32th payment?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS