A series of four annual constant-dollar payments beginning with $10,000 at the end of the frst year is growng at the rate of 8% per year. Assume that the base year isthe current year (n=0) The market interest rate is 15% per year and the general infiation rate (f) is 7% per year(a) Eind the present worth of this series of payments, based on constant-dollar analysisThe present worth is $ (Round to the nearest dollar)

so i=1.15/1.07=1.0747663 =7.47663%

Answered: A ser of four annual constant-dolar…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Fill in the table below when P= $10,000, S = $2,000 (at the end of four years), and i= 15% per year. What is the equivalent uniform CR? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15%er year. Complete the accompanying table. (Round to the nearest dollar.) Opportunity Cost of Interest (i=15%) $ Year 1 Investment at Beginning of Year $10,000 Loss in Value of Asset During Year $3,000 Capital Recovery Amount for Year
Using an effective rate of interest of 6% per year, find the DISCOUNTED MEAN TERM (in years) of the following series of payments: £200 payable after 8 years, £100 payable after 12 years, and £450 payable after 16 years. Just formulas, no tables, and correct answer=12.5865
Use the compound interest formulas A = P(1 + r/n)nt and A = Pert to solve (Round answers to the nearest cent), Find the accumulated value of an investment of $10,000 for 5 years at an interest rate of 5.5% if the money isa. compounded semiannually; b. compounded quarterly; c. compounded monthly; d. compounded continuously.
Calculate the present values at t = 0 (now) of the following cash flows: j. The first cash flow at t = 1 is $100. Every year thereafter, the payment increases by 3% over the previous year’s payment. This continues for 9 years past the first payment (for a total of 10 payments). What is the present value of this growing annuity if the effective annual discount rate is .02 (2%)? k. $50 every year and a half forever, with the first payment after 1.5 years, where the effective annual rate is .05 (i.e., 5%).
Present value of amounts due Assume that you are going to receive $ 50,000 in 10 years. The current market rate of interest is 4%. A.Using the present value of $ 1 table in Exhibit s, determine the present value of this amount compounded annually. B.why is the present value less than the $50,000 to be received in the future?
Present Value of Amounts Due Assume that you are going to receive $380,000 in 10 years. The current market rate of interest is 11%. a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually. Round to the nearest whole dollar. $ b. Why is the present value less than the $380,000 to be received in the future? The present value is less due to over the 10 years.
Consider a five-year annuity, with an annual cash flow of $2,500 and a 2.5% rate of discount/yield. If the maturity is raised to six years, all else the same, its price: decreases increases does not change
John takes out a loan for $9600 at 10% interest compounded monthly and is making payments of $136 a month. Calculate his remaining balance after 12 months. John's balance due after 12 months will be $ Time Value of Money Solver Enter the given values. N: = 0 Number of Payment Periods 1:%= 0 Annual Interest Rate as a Percent PV: = Present Value. 0 PMT: = 0 Payment FV: == Future Value P/Y: 12 O Payments per Year C/Y: 0 12 0 Compounding Periods per Year PMT: = END Solve Solve Solve Solve Solve
Suppose the term structure of interest rates is shown below: Term Rate (EAR%) 1 year 5.00% 2 years 3 years 5 years 10 years 20 years 4.50% 4.30% 4.30% 4.25% 4.15% The present value of receiving $1000 per year with certainty at the end of the next three years is closest to:
Calculate, to the nearest cent, the future value FV of an investment of $ 10,000 at the stated interest rate after the stated amount of time. HINT [See Quick Examples 1 and 2.] 0.1% per month, compounded monthly, after 4 years
Compute the PV of a perpetuity with monthly payments of $1,000, given an annual discount rate of 4% and a constant annual growth rate in the payment stream of 2% ?
Calculate, to the nearest cent, the future value FV (in dollars) of an investment of $10,000 at the stated interest rate after the stated amount of time. 3% per year, compounded quarterly (4 times/year), after 7 years

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS