A contract calls for payments of $2800 at the end of every 6-month period for 8 years and additional payments of $6000 at the end of 5 years and $7500 at the end of 8 years. What is the present worth of the contract at 7.5% p.a. compounded continuously?

Q: Asset XYZ is selling for $200 in the cash market. Asset XYZ pays the holder $16 per year in…

A: Selling price or Spot price(S) is $200 Dividend Per year is $16, 3 month interest rate(r) is 6% per…

Q: at is the cash value of a three-year lease that require payments of $2097.64 payable at the…

A: Lease is type of agreement where you can pay monthly payment and use the equipment as per need and…

Q: A person contracts two obligations of $ 10,000.00 and $ 15,000.00 that will be paid, the first…

A: The company's aim will be to increase the profits of the company. The profits will be arrived at by…

Q: A contract requires payments of $2624.00 today, $ 4060.00 in 2 years, and $ 4091.00 in 5 years. When…

A: To determine when the contract can be fulfilled by a single payment equal to the sum of the required…

Q: A contract is estimated to yield 48 quarterly net returns of $3000 beginning three months from now.…

A: Net present value is the difference between present value of positive cash flow and present value of…

Q: A contract requires lease payments of $800 at the beginning of every month for 6 years. a. What is…

A: The present value of an annuity due is the value of a series of equal payments that occur at the…

Q: Payments on a four​-year lease valued at $32,050 are to be made at the beginning of every six…

A: We need to use PMT formula to calculate payment semi annual payment. PMT =P*i1-1(1+i)n*(1+i) where…

Q: A contract requires payments of $4954.00 today, $4004.00 in 3 years, and S 2583.00 in 5 years. When…

A: TVM is the concept that considers money's interest-earning capacity, which makes money earned…

Q: Jenny Enterprises has just entered a lease agreement for a new manufacturing facility. Under the…

A: Monthly payment (C) = $21,500 Monthly interest rate (r) = 0.0072 (i.e. 0.0864 * 12) Monthly period…

Q: A contract requires lease payments of $900 at the beginning of every month for 5 years. a . What is…

A: a)To calculate the PV of the contract with an annual compounding interest rate, we first need to…

Q: A washer-dryer combination can be purchased from a department store by making monthly credit card…

A: For the calculation of purchase price, we need to use the following formula for annuity due   where…

Q: A payment of $2,450 is due in 2 years and $3,300 is due in 4 years. These two original payments are…

A: A payment of $2450 is due in 2 years and $3300 is due in 4 years. These two original payments are to…

Q: A four-year lease agreement requires payments of RM10, 000 at the beginning of every year. If the…

A: Cash value of the lease is the present value of all lease payments.

Q: A loan of P12, 500 is to be repaid with equal quarterly payments for one year with an interest of 6%…

A: Amortization table is a schedule which shows periodic lease or loan payments. The periodic payment…

Q: Q5: A contract requires lease payments of $700 at the beginning of every month for 5 years. a. What…

A: Given the following: Monthly lease payment = $700  Lease period = 5 years  Interest rate = 3.25%…

Q: A leasing contract calls for an immediate payment of $109,000 and nine subsequent $109,000…

A: Compound = Semiannually = 2Payment = p = $109,000Time = t = 10Discount Rate = r = 14 / 2 = 7%

Q: A contract has been signed to lease a building at P200,000 per year with an annual increase of…

A: Time value of Money :— According to this concept, value of money in present day is greater than the…

Q: A payment of $2,800 is due in 2 years and $3,500 is due in 4 years. These two original payments are…

A: Present ValuePresent Value (PV) of a future amount is value of that amount in current time period.…

Q: Debt payments of $1,800 due today and $1,200 due in 210 days are to be combined into a single…

A: Interest = Prinicpal * Rate of interest * time The payment due today = $1,800 will be delayed by 80…

Q: Your company agreed to pay a maintenance contractor $ 3.677 as the first payment at the end of the…

A: Annuity refers to series of equalized payments that are either made start or end of definite period…

Q: Suppose we have an asset currently worth $ 2,000. The current continuously compounded rate is 4% for…

A: Given: Current amount = $2,000 Interest rate = 4% Compound = semi annually

Q: a contract can be fulfilled by making an immediate payment of 11700 or equal payments at the end of…

A: Here, Present value (PV) = 11,700 Interest rate (RATE) = 10.7% compounded monthly No. of compounding…

Q: A contract requires lease payments of $700 at the beginning of every month for 4 years. a. what is…

A: Present value is the equivalent value today of the future payments based on the time and interest…

Q: A contract has been signed to lease a building at Php. 200,000.00 per year with an annual increase…

A: The lease payments discussed here are a form of a growing annuity. A growing annuity is a set of…

Q: Pepe has been signed a contract to lease a machine at P150,000 per year with an annual increase of…

A: We need to find the present value of lease payments. Let CFn be the lease payment in year n. Also,…

Q: Payments on a six-year lease valued at $42050 are to be made at the beginning of every six months.…

A: Semi - annual payment can be calculated as: = Total amount / Present Value Factor of annuity (i%, n…

Q: A contract requires payments of $5934.00 today, $2815.00 in 2 years, and $ 5592.00 in 5 years. When…

A: Step 1:Identify the present value (PV) of each payment. Since the payments are made at different…

Q: Assume an asset sells in the spot market for a price of $140, the risk-free rate is 5%, and a…

A: Solution:Forward contract means right to buy or sell the underlying asset at maturity.

Q: what is the present value of a 12-year lease agreement with the interest of 7.5% that requires…

A: Annual lease payment (P) = 4250 Number of annual payments (n) = 12 Annual interest rate (r) = 7.5%

Q: Payments of $1,600 in 1 year and another $2,300 in 4 years to settle a loan are to be rescheduled…

A: Future value refers to the value of current value of an asset that will be present at some future…

Q: A contract has been signed to lease a building at P30, 000 per year with an annual increase of P1,…

A: Lump Sum today Equivalent = Present Value of Future Cash Flows

Q: Determine the present worth of a geometric gradient series of Contract B at an interest rate of 8%…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: A contract requires lease payments of $900 at the beginning of every month for 5 years. a. What is…

A: The problem is asking for the present value of a lease contract. The lease payments are $900 per…

Q: Reference rate is 6-month Treasury bill (182 days to maturity). The FRA settles in 270 days. The…

A: To calculate the amount of compensation that must be paid under the agreement at settlement, we need…

Q: What is the equivalent annual cost in years 1 through 9 of a contract that has a first cost of…

A: The equivalent annual cost is equivalent cost that would replace the all cost including initial cost…

Q: When deciding on a contract based on present value and a discount rate of 10%, what other factors…

A: The question is based on the concept of investment appraisal based on the idea of capital budgeting.

Q: A contract requires lease payments of $ 900 at the beginning of every month for 6 years. What is the…

A: Formula used for present value is given belowwhere,Monthly lease payment PMT = $900Annual interest…

Q: contract requires lease payments of $800 at the beginning of every month for 6 a. What is the…

A: Present value is equivalent value of  future money today considering the interest and period of cash…

Q: Consider a contract that pays out $1,103 in 6 months, $139 in 12 months, $72 in 18 months, $5 in 2…

A: Contract price refers to the price at which the goods are purchased by the buyer from the seller as…

Q: A lease valued at $22,000 requires payments of $1,721 at the beginning of every three months. If…

A: Lease is referred to as the contract which outlines the terms under which one party agrees to rent…

Q: A contract requires payments of $4610.00 today, $5440.00 in 2 years, and $4438.00 in 5 years.…

A: Present value is the equivalent value today of the future payments based on the time value of money…

Q: What is the equivalent annual cost in years 1 through 11 of a contract that has a first cost of…

A: Present worth (PW) of costs ($) = 65,000 + 15,000 x P/A(11%, 9) x P/F(11%, 2)= 59,000 + 15,000 x…

Q: 00 requires payments of $1,629 at the beginning of every three months. If money is worth 5%…

A: Given that there is a lease valued $22,000 and $1629 is paid at the beginning of each quarter @5%…

Q: leasing contract calls for an immediate payment of $101,000 and nine subsequent $101,000 semiannual…

A: Present value is the equivalent value today of the future cash flow based on the time value of money…

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.