Calculate profit of the bank if you know that: You accept deposit 1000 Obligatory reserve rate = 20% Rate for deposit = 10% You invest as much as you can in bonds which have present value 80 and will be bought by 100 in year from now

Q: 4. The interest rate on a savings account is 3%. Youdeposit £100 today, then £100 at the end of the…

A: The objective of the question is to find the value of x that will empty the savings account after…

Q: Assuming you bought a 182-day Treasury Bill with a face value Ghc 20,000.00 and held it for 45days.…

A: Purchase price = Face value/(1+interest rate*days to maturity/360) Accrued interest = Purchase…

Q: 2. You need to save up for P5,500 in I year. How much should you save now if the bank offers a rate…

A: >Present value is the value of future value that can be earned today. >This can get…

Q: You wish to put your savings of £5000 into a bank account. There are two different offers from bank…

A:

Q: 3. Time Value of Money Assume that ten years from now, you will need $10,000 and that your bank…

A: The concept of the time value of money states that money today has more value than the same amount…

Q: 7 - When you estimate that you can buy a house for 1,000,000 TL in 10 years, if you accept that the…

A: Annuity means where regular payment is made at the end of regular period and full amount with…

Q: Suppose you have an opportunity to buy an annuity that pays $1,000 at the end of each year for 5…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: A fixed-income security pays out a dividend of $5 at the end of each year for 9 years, and a lump…

A: Annual dividend (D) = $5 Number of annual dividends (n) = 9 Lump sum amount (MV) = $105 Lump sum…

Q: You wish to put  your savings of £5000 into a bank account. Bank A has the following offer for…

A:

Q: What interest rate must your bank offer if you want your $2,730 invested today to grow to $3,470 in…

A: Present Value:  The present value is the present sum of a series of fixed payments. The series of…

Q: Assume you make a deposit of $7,500 now into a saving account that pays 12% per year, compounded…

A: Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…

Q: You wish to put  your savings of £5000 into a bank account. There are two different offers from bank…

A:

Q: Suppose an interest rate of 4% a) having $200 today is equivalent to having what amount in one year?…

A: (a) Interest  = 4% Present value =$200 Time = 1 year So, Amount at the end of one year =  Future…

Q: if a bank has 100Mn loan, 200Mn deposit, 10Mn capital and 100Mn investment in Government bond, the…

A: Bank's Balance SheetAssets:Loans: $100 millionInvestments (Government Bonds): $100 million(Since the…

Q: 4. Suppose our savings account ($937.33) pays us compound interest with monthly compounding.…

A: Compounding is related to earning interest on interest. The compounding interest is more beneficial…

Q: If inflation is anticipated to be 6 percent during the next year, while the real rate of interest…

A: The nominal return is the sum of the inflation rate and the real rate that we can calculate using…

Q: Suppose you know that based on the current economic settings, you can purchase 11% more goods next…

A: Interest rates can be of two types – real interest rate and nominal interest rate. The nominal…

Q: You expect to have $12,000 in one year. A bank is offering loans at 5.5% interest per year. How much…

A: We are given  Future value=12000 Rate=5.5% no. of years=1 We will calculate present value in this…

Q: calculate how much you would have in a savings account 5 $1,000 today, given that the interest paid…

A: Future value is the amount that was deposited and amount of interest accumulated over the period of…

Q: What will a deposit of $5500 at 7.8% compounded monthly be worth if left in the bank for 5 years?…

A: In the TVM calculator the input parameters will be: N  = 60 (5 years * 12 months in a year = 60) I%…

Q: Suppose the bank will give you 5 percent interest rate for your money on deposit and the rate of…

A: Nominal interest rate (i) = 5% Inflation rate (f) = 3% r = Real rate

Q: Suppose that you want to take out a loan and that your local bank wants to charge you an annual real…

A: Compute the nominal interest rate: Nominal interest rate is calculated by using following formula:

Q: P = ? 2.000.000 6 8.000.000 12 6.000.000 14

A:

Q: At the end of each of the next 5 years, you will deposit the following amount into your savings…

A: Compounding the present value provides future value

Q: A US savings bond will pay you $1,000 in 3 years. If return is 2.85%, how much shoudl you pay for…

A: The payment made for bond at current year will be such as investor will realize 2.85% in each of…

Q: Time value of money practice problems.  How would you solve these using a financial calculator?…

A: The computation of the Future value as follows:

Q: Example 2.14: Calculating the present value of an annuity due at 12% An investor wants to buy an…

A: The objective of the question is to calculate the present value of an annuity due at 12% interest…

Q: 4. The interest rate on a savingsaccount is 3% . You deposit£100 today, then £100 at theend of the…

A: The objective of the question is to find the value of x that will empty the account after the final…

Q: A local bank is advertising that you can double your money in eleven years if you invest with them.…

A: In Simple rate of interest there is no effect of compounded Amount= principal * (1+rate*time)

Q: A $4000 initial deposit in a bank account grows continuously according to the formula…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: You want to invest $100 in a project whose cash flows have a duration of 4 years. You invest $10 of…

A: Particular Amount Formula Investment amount $100   Own funds $10   Funds to be borrowed $90…

Q: Assume you have a student loan that you will pay off in 10 years. How much will you save in interest…

A: The question is related to refinancing of loan which was previously taken at higher rate of…

Q: 15. If you make a single deposit into an account, at what annual interest rate compounded yearly…

A: It can be calculated using Yield to maturity can be calculated by following function in excel =RATE…

Q: 3. You invest $400 into a bank account at the beginning of each year for 20 years. The account pays…

A: An annuity is a financial product or contract designed to provide a regular stream of income for an…

Q: suppose the interest rate on a 3 year treasury note is 1.00% and 5 year notes are yielding 3.50%…

A: We know the spot rates. We have to calculate the forward rate. If Si is the spot rate for year i and…

Q: Present value of annuities and annuity payments me present value of an annuity is the sum of the…

A: First let us define annuity. An annuity is a contract that provides a series of payments made at…

Q: How much will you need to put in the bank today at 4% interest to have P20,000 in five years?

A: Present value = Future value / (1 + Rate)^Time where, Future value = P20,000 Rate = 4% Time = 5…

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.