Fill in the table below when P= $10,000, S = $2,000 (at the end of four years), and i= 15% per year. What is theequivalent uniform CR?Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15%er year.Complete the accompanying table. (Round to the nearest dollar.)Opportunity Costof Interest(i=15%)$Year1Investmentat Beginningof Year$10,000Loss in Valueof AssetDuring Year$3,000CapitalRecoveryAmount for Year

The opportunity cost of interest = Investment at the beginning of the year * Interest rateCapital recovery amount for year = Payment - The opportunity cost of interestEquivalent uniform CR = (Future value / [(1 + Interest rate) ^ Number of years] - 1) * Interest rateYear 1Opportunity cost of interest = $10,000 * 0.15 = $1,500Capital recovery amount for year = $2,000 - $1,500 = $500Year 2Investment at beginning of year = $10,000 - $500 = $9,500Opportunity cost of interest = $9,500 * 0.15 = $1,425Capital recovery amount for year = $2,000 - $1,425 = $575Year 3Investment at beginning of year = $9,500 - $575 = $8,925Opportunity cost of interest = $8,925 * 0.15 = $1,338.75Capital recovery amount for year = $2,000 - $1,338.75 = $661.25Year 4Investment at beginning of year = $8,925 - $661.25 = $8,263.75Opportunity cost of interest = $8,263.75 * 0.15 = $1,239.56Capital recovery amount for year = $2,000 - $1,239.56 = $760.44YearInvestment at the Beginning of the YearOpportunity Cost of Interest (i=15%)Capital Recovery Amount for Year1$10,000$1,500$5002$9,500$1,425$5753$8,925$1,338.75$661.254$8,263.75$1,239.56$760.44Equivalent uniform CR = ($2,000 / [(1 + 0.15) ^ 4] - 1) * 0.15 = $540.66The equivalent uniform CR is $540.66.

Business

Finance

Fill in the table below when P= $10,000, S= $2,000 (at the end of four years), and i=15% per year. What is the equivalent uniform CR? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15per year. Complete the accompanying table. (Round to the nearest dollar.) Opportunity Cost of Interest (i=15%) $ Year 1 Investment at Beginning of Year $10,000 Loss in Value of Asset During Year $3,000 Capital Recovery Amount for Year

Fill in the table below when P= $10,000, S= $2,000 (at the end of four years), and i=15% per year. What is the equivalent uniform CR? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15per year. Complete the accompanying table. (Round to the nearest dollar.) Opportunity Cost of Interest (i=15%) $ Year 1 Investment at Beginning of Year $10,000 Loss in Value of Asset During Year $3,000 Capital Recovery Amount for Year

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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