answer the two questions: 2. If you plan to receive $5353 after 5 years to invest at 6% interest, what would this be equivalent to today’s money? 3. If you plan to invest EOY 2 $4000, then what would this be equivalent to EOY 4 years? Assume i = 6%.

answer the two questions: 2. If you plan to receive $5353 after 5 years to invest at 6% interest, what would this be equivalent to today’s money? 3. If you plan to invest EOY 2 $4000, then what would this be equivalent to EOY 4 years? Assume i = 6%.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 9EB: If you invest $15,000 today, how much will you have in (for further instructions on future value in...

See similar textbooks

Related questions

Q: Suppose the interest rate is3.6%. a. Having $650 today is equivalent to having what amount in one…

A: Given: Present value = $650 Periodic interest rate = 3.6% per period (annum) n= number of periods =…

Q: Which would you prefer, $650 today or $650 in one year? Does your answer depend on when you need the…

A: a. Having $200 today is equivalent to having 650 × 1.036 = $673.4 in one year. future value =…

Q: Assume that you will receive $2500 at the end of 6 years and want to know the present value (PV) of…

A: Present value refers to the current value of a future sum of money, taking into account a specified…

Q: Suppose the interest rate is 4.3%. a. Having $450 today is equivalent to having what amount in one…

A: The money's present value is its current worth compared to some of its potential future value after…

Q: An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you…

A: Here,

Q: You have been offered a unique investment opportunity. If you invest $10,000 today, you will receive…

A: Amount Investved today is $10,000 Cash flow at year 1 is $500 Cash flow at year 2 is $1,500 Cash…

Q: Suppose you wish to have $18500 in 5 years. use the present value formula to find out how much you…

A: Given data; Future value = $18500 Number of years = 5 Interest rate = 9% compounding frequency = 2

Q: What is the relationship between present value and future value?

A: Future Value : FV is that value which will be received in near future. Present Value : PV is that…

Q: Chris offers you an investmet where if ou investment where if you invest $1,000 today, he'll return…

A: The annual rate of return refers to the yield earned on an investment over the course of one year.…

Q: Using the image attached to answer the following questions. 4) Suppose you invest $14,500 some…

A: Time, the value of money refers to a concept used for evaluating the current value of an asset that…

Q: You are considering a one-year investment. If you put up $1,250, you will get back $1,350. What rate…

A: Here, Present Value of Investment (PV) is $1,250 Future Value of Investment (FV) is $1,350 Time…

Q: If you invest $4,000 today at 10% interest, what is the value of the investment at the end of 5…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Suppose that you are planning to buy a boat in in 28 years [cell B3] for $100,000 [cell B2], and you…

A: Period = 28 yearsBuying cost = $100,000Amount deposited = $26,000

Q: a) If you invest $5 and will receive $8 next year, what is your simple return? b) If you invest $5…

A: Given:Investing an amount of$5 and receive $8 in next yearTo compute:a) Simple returnb) Holding rate…

Q: An example of how to calculate net present value is done using the following. Imagine you have been…

A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…

Q: Suppose you wish to have $16,250 in 5 years. Use the present value formula to find how much you…

A: In this question we need to compute the present value and amount of interest.

Q: d) Suppose a person's expected lifetime is 5 years and they are expected to earn $1000 per year.…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: Suppose you are offered an investment opportunity that will pay $2,500 in five years if you invest…

A: We need to use equation below to calculate the annual rate of return of investment.WhereFVn = future…

Q: a) Suppose you have $10,000 to invest in a savings account, and you have two investment options…

A: Given Investment amount 10000 rates 5% and $4.5%

Q: Suppose you wish to have $17,250 in 5 years. Use the present value formula to find how much you…

A: Compound = semiannually = 2 Future value = fv = $17,250 Time = t = 5 * 2 = 10 Interest rate = r = 5…

Q: If I invest £100 and get back £300, what is the percentage return over. a. 5years? b. 10years?…

A: The return for the period will depend upon the beginning investment, ending value, and the number of…

Q: Suppose an investment will pay $7,000 in 44 years from now. If you can earn 6.15% interest…

A: Formulas: Present value = Future value / (1+rate)^years

Q: Consider an investment which pays $3,000 at the end of year 1, year 2, and year 3. In year 4, the…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: (a) If the interest rate is 6% per year compounded quarterly, what is the effective annual interest…

A: Information Provided: Interest rate = 6% compounded quarterly NOTE: As per our policy, we only…

Q: 4. If you invest $10,000 today at an interest rate of 7% for 5 years, what is the present value of…

A: The time value of money refers to the observation that is better to receive money sooner than later.…

Q: You have RM 5,000.00 you want to invest for the next 45 years until retirement. You are offered an…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: 4. If you receive $116 each month for 28 years and the discount rate is 0.08, what is the present…

A: This Question require to calculate the Present Value of Cash flows received every month for 28…

Q: 2. If you receive $99 each quarter for 17 years and the discount rate is 0.05, what is the future…

A: In this Question we require to calculate the Future Value of Cash flows that we will receive every…

Concept explainers

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.

Question

Please answer the two questions: 2. If you plan to receive $5353 after 5 years to invest at 6% interest, what would this be equivalent to today’s money? 3. If you plan to invest EOY 2 $4000, then what would this be equivalent to EOY 4 years? Assume i = 6%.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Suppose you wish to have $18500 in 5 years. use the present value formula to find out how much you should invest now at 9% interest, compounded semiannually, in order to have $18,500, 5 years from now. Then calculate the interest. The possible answers are: a. 6587.34 b. 8325.00 c. 10175.00 d. 11912.66 I understand how to do the present value formula but after that I don't understand how to calculate the interest, please help!
Solve this question with steps please. The subject is financial management.
Suppose you are offered an investment opportunity that will pay $2,500 in five years if you invest $2,000 today. What is the implied rate of return? A) 4.56% B) 4.00% C) 5.00% D) 3.62% E)25.00%
An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you $200 at the end of year 4, $300 at the end of year 5, and $500 at the end of year 6. If the rate of interest earned on the investment is 8%, what is the present value of this investment? What is its future value? How do you solve this with excel?
Suppose the interest rate is3.6%. a. Having $650 today is equivalent to having what amount in one year? b. Having $650 in one year is equivalent to having what amount today? c. Which would you prefer, $650 today or $650 in one year? Does your answer depend on when you need the money? Why or why not? a. Having $650 today is equivalent to having what amount in one year? It is equivalent to $____. (Round to the nearest cent.)
Can u solve from excel
An example of how to calculate net present value is done using the following. Imagine you have been given an investment opportunity wherein if you invest $1,200 today, you will receive $650 dollars at the end of each year for the next 5 years. You could separately choose to invest your money at 10% interest each year. Should you take the investment opportunity? To find the answer, use the NPV formula:
(Use Calculator or Formula Approach) Suppose you had a relative deposit $10 at 5.5% interest 200 years ago. How much would the investment be worth today?
Suppose that you are planning to buy a boat in in 28 years [cell B3] for $100,000 [cell B2], and you deposit into your account the amount of $26,000 CAD [cell B1]. (a) What average annually compounding rate of return (as a percentage, correct to 2 decimals) should you earn so you can accumulate the lump sum needed to achieve your goal [cell B5]? Use the RATE function.(Note: You might have to modify the format of cell B5 so that it shows 2 decimals.) (b) What is the correct formula (using 18 characters or less) that should be placed in cell B5?Note: There are to be NO numbers in the function call (apart from a 0 if appropriate), only cell references, or negative cell references where appropriate. In excel pls.
If I invest £100 and get back £300, what is the percentage return over. a. 5years? b. 10years? with working please
Assume that you will receive $2500 at the end of 6 years and want to know the present value (PV) of that future sum. Assuming a positive interest rate (required rate of return), which of the following is a possible number for the present value of the $2500? Even without knowing the interest rate, it is possible to answer this question. O A. $2742.53 B. $2632.45 O C. $1967.25 OD. $2572.50 O E. None of the above is a possible number.
You have RM 5,000.00 you want to invest for the next 45 years until retirement. You are offered an investment plan that will pay you 6 percent per year for the next 15 years and 10 percent per year for the last 30 years.a) Explain the time value of money principleb) Identify the underlying assumption of the time value of money principlec) Draw a graph that illustrates the relationship between interest rates and the present value of RM 1,000.00 to be received in one year.d) Suggest how you can minimize the amount of cash you must invest in order to reach your retirement goal.e) Compute the amount you will have at the end of the 45 years.f) Calculate the amount you would have if the investment plan pays 10 percent for the first 15 years and 6 percent per year for the next 30 years.