Assume you are told that by investing $100,000 now, you will receive $10,000 per year starting in year 5 and continuing forever. If you accept the offer, the rate of return on the investment is:a. 4% per yearb. between 6% and 7% per year c. between 7% and 10% per yeard. over 12% per year

Q: Find the annual worth (AW) of the following investments (from year 1 to year 20) if you invest $600…

A: Investment schedule:

Q: An investment offers $12,000 per year for 20 years, with the first payment occurring one year from…

A: The time value of money concept holds the utmost relevance while determining the future value and…

Q: You plan to invest $50,000 today at an annual interest rate of 12% over 5 years. What the future…

A: Following details are given in the question: Present value (Investment today) = $50000 time period =…

Q: If you want to save $50,000 in 8 years, you will earn 6.5% on your investment. a. How much will your…

A:

Q: You deposit $19,000 today in an investment account and the annual rate of return is 12%, what will…

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

Q: You are going to invest $6829 in 1 years and $7200 in 4 years.  If you expect to earn a return of…

A: The time value of money is a fundamental concept in finance that recognizes the idea that money…

Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300…

A: The time value of money refers to the concept in finance that takes into account the effect of…

Q: How much will you have saved after 6 years by contributing $1,200 at the end of each year if you…

A:

Q: u are able to invest $100 at the end of 1 year into an investment earning 6%. At the end of year 2,…

A: Future value of money increases with due to accumulation of interest over the period of time of…

Q: You are looking at an investment that promises to pay $2000 per year forever! What is the value of…

A: A cash flow that goes on forever is called a perpetuity.Here the cash flow of $2000 per year forever…

Q: An investment pays an annual cash flow of $1 forever. The appropriate discount rate is 4% per year.…

A: Annual cash flow (C) = $1Discount rate (r) = 0.04Present value = ?Present value will be the…

Q: years from today, and 2,000 four years from today. What will the value of your account be 4 years…

A: The future value is the estimated value of an investment that accounts for compound interest or…

Q: If the annual interest rate is 2%, what is the present value of this opportunity?

A: The present value assists in determining the current value of a future sum of money. It accounts for…

Q: If an investment advisor promises to double your money in 6 years, she is promising an annual rate…

A: Using the following formula we can compute annual rate of return.Future Value (FV) = Present Value…

Q: A. Assume that you have $7500 to invest. You plan to invest it for 10 years at a rate of 7% per…

A: Future Value = Present Value * (1 + Interest Rate)^Time

Q: How much should you pay today for an investment that provides $400 in 15 years? Assume you want to…

A: It is a case of calculating present value of the future payment that takes place in 15 years time.…

Q: Suppose that you plan to invest $1500 at the end of each of the next 9 years, and you want to have…

A: Rate of return refers to the minimum return to be earned by the investors on the initial investment…

Q: What is the present value of an investment that promises to pay the investor $6,500 at the end of…

A: Per year payment(annuity) = $6500 Time =9 years Rate =14% *end of the year payment

Q: (RR calculation) Your investment advisor has offered you an investment that will provide you with a…

A: The IRR of an investment refers to the measure of the profitability of the investment calculated by…

Q: ou want to have $1,970,000 at the end of 22 years. You have $6,000 to invest now, and you will…

A: Future value includes the amount of deposits made and the amount of compounding interest accumulated…

Q: how much should you invest now in a single investment if you expect to withdraw $45,000 in 9 years…

A: Step 1: Introduction Present Value: The value of the money identified today for the money/sum of…

Q: An investment offers $8800 per year for 14 years with the first payment occuring one year from now.…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $400…

A: The Future value refers to the value of the future expected cash flow at future date. It is…

Q: If you invest $4,000 at the end of every year for nine years at an interest rate of 6%, the balance…

A: Future value in case of continues payments  = Each installment × (1+pir) ^n/pir Where  pir =…

Q: saver wants $100000 after 10 years and believes it is possible to earn an annual rate of 8% on…

A: Amount required = FV = $100,000No of years = nper = 10 yearsInterest rate = rate = 8%Yearly…

Q: If Quail Company invests $46,000 today, it can expect to receive $12,000 at the end of each year for…

A: Net present value method is used to evaluate the investment projects. We can evaluate the project by…

Q: You are told that if you invest $10,900 per year for 12 years (all payments made at the end of each…

A: Annual Payment = pmt = $10.900Time = nper = 12 YearsFuture Value = fv = $670,000Present Value = pv =…

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.