Apply the concept from page 8-9 practice 4 of the VLN: How much could you borrow today if you make monthly payments of $300.00 for the next 5 years with a market rate of interest of 3%? Round your answer to the nearest dollar.________ 4. How much could you borrow today if you make semi-annual payments of $1,000 for 5 yearsat an 8% market interest rate?%244710%3DCASH FLOWX FACTOR (%, n)orNIYPVPMTFV5. How much would you pay for an investment that provides $100 semiannually for five yearsand at the end of five years it would also provide $5,000? At the time of your decision, themarket rate of interest is 3.5%.$5000$100$100$100$100$100$100$100$100$100$100145679.10%3DCASH FLOWFACTOR (%, n)CASH FLOWFACTOR (%, n)orI/YPVPMTFVAssets and Liabilities are recorded at PRESENT VALUE (cash equivalent)6. On January 1st, BB Company acquired a truck that had a purchase price of $38,000. The selleragreed to allow BB to pay for the truck over a five-year period (12 payments per year, 60payments in total) at 3% interest. Determine the amount of each payment:CASH FLOWFACTOR (%, n)Present Valueor1/YPVPMTFVPage 8-9Chapter 8 CASH FLOW| FACTOR ( %, n )| |Present Value|orEquation for the Factor TablesCash flow x Factor = ValueCash flow x PV factor = Present valueCash flow x FV factor = Future ValueFor the Financial CalculatorBAII PLUS* TEXAS INSTRUMENTSIf the analysis is a single sum,then the PMT=0If the analysis is an annuity, theneither PV or FV will be = 0.If the Value is FV, PV = 0If the Value is PV, FV =0QuITSETENTERDELCPTONIOFF2NDCFIRRAMORTCR TVHNPHTIVRAND+HYPSINCosTANINVDATASTATBOND8LN79ROUNDDEPRBREEVHSTO46DATEICONVPROFIT+RCLCIR WORE13ANSCECMEMFORMATRESET+|-Calculate any Factor by typing in the number of compounding periods (n) and interest rate (%)FVA4.18363PV$1PVAFV$143.00%1.125510.888493.717101. Cash flow: single sum (PV or FV) orannuity (PMT); if PMT is involved, it willALWAYS be the CASH FLOW!2. Value: Present value or Future Value3. I/Y (divide annual interest bycompounding periods per year)4. N: number of compounding periods overChapter 8 the life afs'compounding periods perPage 8-1year)

In the context of the given question, we can determine the required amount of borrowing money by…

Apply the concept from page 8-9 practice 4 of the VLN: How much could you borrow today if you make monthly payments of $300.00 for the next 5 years with a market rate of interest of 3%? Round your answer to the nearest dollar.________

Apply the concept from page 8-9 practice 4 of the VLN: How much could you borrow today if you make monthly payments of $300.00 for the next 5 years with a market rate of interest of 3%? Round your answer to the nearest dollar.________

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 12MC: (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest...

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Question

4. How much could you borrow today if you make semi-annual payments of $1,000 for 5 years
at an 8% market interest rate?
%24
4
7
10
%3D
CASH FLOW
X FACTOR (
%, n)
or
N
IY
PV
PMT
FV
5. How much would you pay for an investment that provides $100 semiannually for five years
and at the end of five years it would also provide $5,000? At the time of your decision, the
market rate of interest is 3.5%.
$5000
$100
$100
$100
$100
$100
$100
$100
$100
$100
$100
1
4
5
6
7
9.
10
%3D
CASH FLOW
FACTOR (
%, n)
CASH FLOW
FACTOR (
%, n)
or
I/Y
PV
PMT
FV
Assets and Liabilities are recorded at PRESENT VALUE (cash equivalent)
6. On January 1st, BB Company acquired a truck that had a purchase price of $38,000. The seller
agreed to allow BB to pay for the truck over a five-year period (12 payments per year, 60
payments in total) at 3% interest. Determine the amount of each payment:
CASH FLOW
FACTOR (
%, n)
Present Value
or
1/Y
PV
PMT
FV
Page 8-9
Chapter 8

CASH FLOW| FACTOR ( %, n )| |Present Value|
or
Equation for the Factor Tables
Cash flow x Factor = Value
Cash flow x PV factor = Present value
Cash flow x FV factor = Future Value
For the Financial Calculator
BAII PLUS
* TEXAS INSTRUMENTS
If the analysis is a single sum,
then the PMT=0
If the analysis is an annuity, then
either PV or FV will be = 0.
If the Value is FV, PV = 0
If the Value is PV, FV =0
QuIT
SET
ENTER
DEL
CPT
ONIOFF
2ND
CF
IRR
AMORT
CR TVH
N
PHT
IV
RAND
+
HYP
SIN
Cos
TAN
INV
DATA
STAT
BOND
8
LN
7
9
ROUND
DEPR
BREEVH
STO
4
6
DATE
ICONV
PROFIT
+
RCL
CIR WORE
1
3
ANS
CEC
MEM
FORMAT
RESET
+|-
Calculate any Factor by typing in the number of compounding periods (n) and interest rate (%)
FVA
4.18363
PV$1
PVA
FV$1
4
3.00%
1.12551
0.88849
3.71710
1. Cash flow: single sum (PV or FV) or
annuity (PMT); if PMT is involved, it will
ALWAYS be the CASH FLOW!
2. Value: Present value or Future Value
3. I/Y (divide annual interest by
compounding periods per year)
4. N: number of compounding periods over
Chapter 8 the life afs'compounding periods per
Page 8-1
year)

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