a. Find the FV of $1,000 invested to earn 8% after 5 years. Round youranswer to the nearest cent.b. What is the investment's FV at rates of 0%, 4%, and 30% after 0, 1, 2,3, 4, and 5 years? Round your answers to the nearest cent.Year0121469.3245ՄSSSS$0%$$$$$$LAInterest Rate4%ŁALA30%Choose the correct graph of future value as a function of time and rate.Note: blue line is for 0%, orange line is for 4%, and grey line is for 30%.

We can determine the FV using the formula below:

Answered: b. What is the investment's FV at rates…

b. What is the investment's FV at rates of 0%, 4%, and 30% after 0, 1, 2, 3, 4, and 5 years? Round your answers to the nearest cent.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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# 2: An investment will pay $100 at the end of each of the next 3 yrs, $200 at the end of yr 4, $300 at the end of yr 5, and $500 at the end of yr 6. If other investments of equal risk earn 8% annually what is FV1?
The following investment requires a table factor for a period beyond the table. Calculate the new table factor and the present value (principal). Use Table 11-2. Round your new table factor to five decimal places and your present value to the nearest cent. Compound Amount New Table Factor Term of Nominal Interest Present Investment (years) Rate (%) Compounded Value $36,000 36 7 annually $ Need Help? Read It
j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 10%. Payment $100 $300 $500 Year 1 2 3 Round your answers to the nearest cent. PV of investment: $ FV of investment: $
Suppose the term structure of risk-free interest rates is as shown here: a. Calculate the present value of an investment that pays $1,000 in 2 years and $4,000 in 5 years for certain. b. Calculate the present value of receiving $900 per year, with certainty, at the end of the next 5 years. To find the rates for the missing years in the table, linearly interpolate between the years for which you do know the rates. (For example, the rate in year 4 would be the average rate in year 3 and year 5.) c. Calculate the present value of receiving $2,700 per year, with certainty, for the next 20 years. Infer rates for the missing years using linear interpolation. (Hint: Use a spreadsheet.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) 2 years 3 years 5 years 7 years 1 year 2.06 2.44 2.64 3.22 3.74 Term Rate (EAR, %) Print Done 10 years 4.25 20 years 5.09 I X t cent.)
If the risk-free rate is 3.80 percent and the risk premium is 2.8 percent, what is the required return? (Round your answer to 1 decimal place.) Required return
If an investment of $2,000 grew to $2,520 in three periods, what is the interest rate at which the investment grew? Solve using both present and future value tables.
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment Annual net cash flows Life of the equipment $600,000 $ 64,000 15 years Salvage value Discount rate 6% The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: (Round your answer to 1 decimal place.)
Suppose you have a project that has a 0.6 chance of doubling your investment in a year and a 0.4 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.) Answer is complete but not entirely correct. 40.99 Standard deviation %
QUESTION 3 Discuss the meaning of "the present value of a future amount"? Give the general equation for present value? a. Farizal intends to buy a new car, the Myvi for RM57,650, but only has RM20,000 in cash. How many years will it take for RM20,000 to grow to RM57,650 if it is invested at 10% interest compounded annually? b. Wahida has decided to invest RM1,000 for two years in a savings account paying 6% interest compounded semi-annually. Compute the future value of Wahida's investment? C. d. Sharifah Aminah receives a mixed stream of cash flows from an investment over the next five years: Year Cash Flow (RM) 5,000 6,500 4,500 5,200 5,800 1 What is the initial amount that Sharifah Aminah should invest if the required return is 10%? 2345
15. Consider the following possible returns over the next year on an asset.Return Probability–£40 0.5£40 0.5What is the standard deviation of return of the asset.

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