amount of funding now is equivalent to the amount in one year as it grows be compound interest rate. The annual rate is 10% compounded monthly. If the funding is $100K, what is the equivalent one year in the future

Q: Assume that you want to have $ 4100 saved in a sinking fund in 1 year. The account pays 3%…

A: Future value (FV) = $ 4100 Annual interest rate = 3% Monthly interest rate (r) = 3%/12 = 0.25%…

Q: A loan of $50,000 is due 10 years from today. The borrower wants to make monthly payments at the end…

A: The payments made constantly without any uneven time gap are called annuity where nominal amount for…

Q: An investment is expected to result in equal payments of $9940.00 at the end of each quarter for the…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: you start saving $1,111 at the end of year one, and increase it by 20% every year after the first…

A: Present value of growing ANNUITY =P/(r-g)((1-(1+g/1+r)n)) P=Start DEPOSIT =1111 r=interest rate =25%…

Q: Assume you want to have $4050 saved in a sinking fund in 1 year. The account pays 3.5% compounded…

A: The amount of money invested over a period of time with the assumption of investment growth at a…

Q: What is the value today of receiving a single payment of $81,374 in 4 years if your required rate of…

A: Present Value is the current price of future value which will be received in near future at some…

Q: What amount must be set aside now to generate payments of $30,000 at the beginning of each year for…

A: Annual payment (P) = $30,000 Interest rate (r) = 5.52% Period (n) = 10 Years

Q: How much more will you have in your RRSP 30 years from now if you start to contribute $1000 per year…

A: The payments made constantly without any uneven time gap are called annuity where nominal amount for…

Q: At an interest rate of 8% per year, $50,000 today is equivalent to how much a year from now?

A: Future value refers to the value of an asset or cash at a specified time in the future. It is based…

Q: Assume that you want to have $ 2900 saved in a sinking fund in 1 year. The account pays 5%…

A: Future value is the estimated value of current assets that is discounted at an assumed rate of…

Q: An investment promises two payments of 650 on dates two and four months from today if the required…

A: The present value is the current value of future cash flows. Investors and money lenders use this…

Q: Assume you are offered a $20,000 annual payment, made quarterly (m =4). Payments begin in 10 years…

A: First Annual Payment: $20,000 (paid quarterly, for a total of $5,000 every quarter).Payment Start…

Q: With an interest rate of 14.5% compounded annually, how much will be required in 10 years to repay a…

A: To determine the amount that will be needed after 10 years to repay the loan received today, we need…

Q: An investment company pays 7% compounded semi annually. You want to have 14,000 in the future. How…

A: The idea of the time value of money (TVM) holds that a quantity of income is valued currently more…

Q: An investment makes annual payments. The first payment of $245 is due in one year at i = 1. The…

A: Present value refers to the current worth of the amount that is expected to be received in future by…

Q: Starting next year you plan to deposit $1000 each year into an account earning 9.25% effective…

A: Solution:- When an equal amount is deposited each period at end of period, it is called ordinary…

Q: Compute for the present value of a perpetual investment that would pay Php. 25,000 every year if the…

A: Annual payment (C) = Php 25000 Interest rate (r) = 15%

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.