A contract requires payments of $4954.00 today, $4004.00 in 3 years, and S 2583.00 in 5 years. When can the contract be fulfilled by a single payment equal to the sum of the required payments if money is worth 7% p.a. compounded semi - annually? State your answer in years and months (from 0 to 11 months).

A contract requires payments of $4954.00 today, $4004.00 in 3 years, and S 2583.00 in 5 years. When can the contract be fulfilled by a single payment equal to the sum of the required payments if money is worth 7% p.a. compounded semi - annually? State your answer in years and months (from 0 to 11 months).

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

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Similar questions

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
A loan of $5514 borrowed today is to be repaid in three equal installments due in one-and-a-half years, three years, and five -and-a-half years, respectively. What is the size of the equal installments if money is worth 2.3% compounded monthly?
You are offered a $3,000,000 contract to be paid to you over 6 years at $500,000 per year. The first payment will be made at the end of the year. If the current market interest rate is 3.5%, what is the contract really worth to you? $2,500,000.00 $3,275,076.09 $2,664,276.51 $3,000,000.00
An installment contract for the purchase of a car requires payments of $346.34 at the end of each month for 2 years. Interest is 5% per annum compounded monthly. (a) What is the amount financed? (b) How much is the interest cost? (a) The amount financed is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The interest is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Payments of $1,400 in 1 year and another $2,800 in 4 years to settle a loan are to be rescheduled with a payment of $1,000 in 17 months and the balance in 34 months. Calculate the payment required in 34 months for the rescheduled option to settle the loan if money earns 5.3% compounded monthly during the above periods. Please provide detailed solution.
F3
SHOW THE SOLUTION Find the present value of a contract that requires yearly payments of ₱ 11,696 for 20 years. Money is worth 2.95% for the first eight years and 7.69% for the last 12 years.
A contract calls for a payment of P 1,200 at the beginning of each month for 12 months. At what rate compounded annually would this agreement be equivalent to a cash payment of P 13,590? Select one: O a. 13.63% O b. 10% O c. 12% O d. 12.45%
What is the equivalent AW of a one-year contract that pays $6,000 in the first month and increases by $700 for each month thereafter? MARR = 9% compounded monthly. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 0.75% per month. Choose the correct answer below. OA. The AW is $75,608. OB. The AW is $123,339. Oc. The AW is $200,736. OD. The AW is $122,420. OE. The AW is $47,730.
Finance Question
A loan of R22 000 is granted at 14% pa effective. The loan is to be amortized by forty-two consecutive equal monthly payments Rx. If the first payment is made ten months after the loan is granted, then Rx (rounded to the nearest cent) is equal to:
1. A contract calls for a lump-sum payment of $15,000. Find the present value of the contract assuming. When making these calculations, you need to use a present value factor that is carried to three decimal places to get the correct answers. a. The payment is due in five years, and the current interest rate is 9 percent. Your answer should contain a dollar sign.b. The payment is due in ten years and the current interest rate is 5 percent. Your answer should contain a dollar sign.c. Between the two calculations, A and B, which option is the best option for the person receiving the payment? State in a full sentence why you chose this option.

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