Assuming the current zero rates (based on continuous compounding) for 6 months and nine months are 4% and 5% respectively. Assume further that a FRA was entered into several months ago that enables the holder to earn 6% (per annum based on quarterly compounding) for a 3-month period starting 6 months from now on a principal of $1,000,000. What is the value of the FRA to the person receiving funds?

Q: c) A person invests ugx.200,000 at an interest rate of 10% compounding annually. He receives ugx…

A: Present value shows the amount that is presently worth. It is calculated by using number of periods,…

Q: A person plans to make equal monthly deposits into this account for 20 years at the rate of 6%…

A: Present Value of annuity refers to the value of regular cash flows or payments at equal intervals at…

Q: Find the amount of each payment to be made into a sinking fund which earns 7% compounded quarterly…

A: Answer Future Value $32,000 Period In Years 2.5 Rate 7% Compund  Quaterly Total Periods…

Q: uppose an individual makes an initial investment of $1,200 in an account that earns 6%, compounded…

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

Q: You are making $5,000 monthly deposits into a fund that pays interest at rate of 6% compounded…

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

Q: Use the sinking fund formula shown to the right to determine the semiannual payments with 6​%…

A: Sinking fund formula can be used to calculate the semiannual payment to accumulate the the amount.…

Q: Find the amount necessary to fund the given withdrawals. Quarterly withdrawals of $950 for 5 years;…

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

Q: Calculate the future sum of $1,200, given that it will be held in the bank for 5 years and earn 14%…

A: Below details are given in the question : Present value = $1200 Time period = 5 years  Interest rate…

Q: The payment size is $. (Round to the nearest cent.)

A: End of period payments N = 3.5 years i.e. 14 quarters Interest rate = 8%/4 = 2% per quarter Future…

Q: borrowed Php200,000 from a local bank having an interest of 8% per annum, compounded monthly. If the…

A: Loans are to be paid by the equated monthly payments which carry the payment of principal and…

Q: K Locust Inc. owes $15,000.00 to be repaid by monthly payments of $510.00. Interest is 6% compounded…

A: Since you have posted a question with multiple sub-parts , we will solve first three sub-parts for…

Q: Mr. Nowak has contributed $111.00 at the end of each six months into an RRSP paying 3% per annum…

A: Future Value: Future value is the value of an asset now based on an anticipated growth rate in the…

Q: An accountant wants to withdraw $30,000 from an investment at the beginning of each quarter for the…

A: Time value money is the concept widely used by the management and individual to determine the…

Q: Find the amount necessary to fund the given withdrawals. 2) Quarterly withdrawals of $ 650 for 6…

A: Present value refers to the money present today having more worth than the money will receive in…

Q: I owe Php 50,000 which is due without interest at the end of 2 years. What should my creditor be…

A: As per the time value of money concept, individuals prefer to receive a sum of money at the earliest…

Q: 6. (EQUATION OF VALUES) What single payment at the end of 6 years would replace the following debts?…

A: Discount Rate = 8.5% compounded Semi- Annually Obligation 1 : Php 29,000 due at the end of 1 year…

Q: An annuity providing a rate of return of 6.4% compounded monthly was purchased for $61,000. The…

A: An Annuity is a payment made regularly for a fixed period of time at a fixed interest rate. This is…

Q: Your company has decided to set up a fund for its employees with an initial payment of Rs 27,500…

A: a.Calculate the size of the fund as follows:

Q: Identify the periodic payments. 1. Quarterly payment of an accumulated amount of 80,000 pesos for 2…

A: Here, Accumulated Amount is 80,000 pesos Interest Rate is 8% Compounding Period is Annual Payment…

Q: How long will it take an RESP to grow to $200,000, if the plan owner contributes $250 at the end of…

A: The payment flow which continues for a definite time period and terminates after lapse of time…

Q: A 10,000 loan is paid off over 10 years; interest is 6 percent effective. The borrower uses a…

A: Sinking funds are funds which are set aside for the repayment of a particular debt or loan.

Q: A person borrows $9000 from a bank and agrees to pay it off by equal payments at the end of each…

A: > Given data:> Principal amount = $9000> Time period = 2 Years> Total number of payments…

Q: You have borrowed OMR 12,000 today at 4.5% rate of interest per annum from National Bank of Oman.…

A: given, P = omr 12000 r= 4.5% n = 5

Q: y at the beginning of each month for Php 1,500.00. On the third year onwards, how much are you…

A: First year there was ordinary payment of Php 1000.00 If the payment of each month is - PHP 15000 for…

Q: How much will be received in 6 years if Php35,000 is deposited in an account earning 5.5% interest…

A: Compound interest is an investment method where the interest earned is reinvested back which earns…

Q: A bank pays 6% interest, compounded semiannuall formula to find how much should be deposited (in $…

A: Given, Interest rate = 6% or 0.06 Annual payment (A) = $700 Number of years = 16 years

Q: Find the amount necessary to fund the given withdrawals. Semiannual withdrawals of $550 for 4 years;…

A: Present value refers to the money present today being more valuable than the amount that will…

Q: If money is invested at 12% compounded semiannually, find the present value of P3,000 due at the end…

A: Cash Flow at the time of maturity  P3,000.00 Table value are based on   n = 3.5 Year * 2 7 i =…

Q: The amount of $7,000 is invested in a certificate of deposit (CD) and will be worth $16,000 in nine…

A: Invested amount=$7000Worth in 9 years=$16000

Q: Answer the subquestions below: a. Mr. Formento pays at the end of every month for a loan that…

A:

Q: Find the amount of each payment to be made into a sinking fund which earns 8% compounded quarterly…

A: A sinking fund is a type of fund that sets aside a periodic sum in an account to repay a debt in the…

Q: Solve the problem below on Amortization. (Round amounts to the nearest centavo) Mr. M. Roque obtains…

A: Loan amount (PV) = P 60,000 Interest rate = 8% Quarterly interest rate (r) = 8%/4 = 2% Period = 3…

Q: Find the amount necessary to fund the given withdrawals  yearly withdrawals of $1150 for 10 years;…

A: Present value of annuity: Annuity payment * Present Annuity Factor of $1 at i% for n years. Where, i…

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.