An individual wishes to deposit a certain quantity of money now no that at the end of five years he will have $5000. With interest at 20% per year, compounded semiannually, the amount he must deposit now is closest to: 1900 1928 2416 2965 3241 3300.

Q: A personal account earmarked as a retirement supplement contains $292,400. Suppose $250,000 is used…

A: Annuity refers to the series of payment in equal interval of time for certain time period.  For…

Q: Use the simple interest formula method to find the future value of an ordinary annuity of $2500 paid…

A: An annuity is a payment series that provides the holder with future cash flows in exchange for a…

Q: Future Value Calculation: step-by-step calculation You deposit $500 at the beginning of each year…

A: Present value is the estimation of the current value of future cash value which is likely to be…

Q: What's the future value of $1,654 after 5 years if the appropriate interest rate is 6%, compounded…

A: Present value (PV) = $ 1654 Interest rate = 6% Semi annual interest rate (r) = 6%/2 = 3% Period = 5…

Q: Find the future value of an annuity in 12 years if you deposit $105 at the end of each compounding…

A: Annuity is referred as the instalment paid at the regular interval for a particular period. The…

Q: Find the future value of an annuity in 10 years if you deposit $125 at the end of each compounding…

A: An annuity is a type of agreement or a contract between an individual and an insurance company in…

Q: 5. A person 35 ages wishes to accumulate a fund for retirement by depositing an amount R at the end…

A: Working Note #1 n= 65-35=30 years r=4% Formula to be used=(1+r%)n-1r% Substituting the value in the…

Q: of 3 years? 8. Will Smith will receive $80,000 5 years from now, from a trust fund established by…

A: The objective of the question is to calculate the present value of a future amount of money, given a…

Q: tephen Michaels wants to know how much he must deposit today at 12% interest to provide three equal…

A: Solution: Present value of an ordinary annuity is the present value of future annual payments based…

Q: If you deposit $500 in a savings account that offers3 percent interest, compounded annually, and…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: What amount would you have if you deposited $2,500 a year for 25 years at 8 percent (compounded…

A: The question is based on the concept of Annuity in Financial Management. Annuity refers to the…

Q: if $875 000 is saved for retirement, what rate of interest, compounded semi-annually, will provide…

A: We will use the concept of time value of money here. As per the concept of time value of money the…

Q: Consider an inheritance that pays the beneficiary an annuity of $400 that begins immediately (an…

A: We need to use present value of annuity due formula to calculate present value of cash flows…

Q: Mr. Chips, Inc. wishes to accumulate $1,200,000 to be used to pay off a balloon note at the end of 5…

A: The present value formula is used to compute the today’s value of $1 being paid or received in the…

Q: Find the future value of an annuity in 18 years if you deposit $85 at the end of each compounding…

A: Future value  of annuity formula: FVA=A×1+RMM×N-1RM where, A = annuity R=rate of interest M =…

Q: After how many months will an annuity earning 2.4% annually be worth $500 if $25 is deposited…

A: Interest Rate = 2.4% Annually Rate = 2.4%/12 = 0.2% Future Value (FV) = $500 Monthly Deposit (PMT) =…

Q: 4. The amount that must be set aside today to enable annual payments of $40,000 each for 5 years,…

A: Annuity is the series of equal cash payments over the period.

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.