Answered: Find the present value of a perpetuity…

Find the present value of a perpetuity of P5,000 payable semi-annually if money is worth 7% compounded quarterly. O a. P117,429.00 O b. P171,492.00 O c. P171,942.00 O d. P171,429.00

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A loan of $245,000 is to be repoid in equal quarterly payments over a period of 5 years. If the…

A: Given, Loan amount F = $245,000 Time n = 6 years = 6 * 4 = 24 Interest rate r= 14.5% compounded…

Q: How long in years will a certain sum of money to doubles its amount when deposited at a rate of 5%…

A: Given information, Interest rate: 5% Compounding period: 24 (bi-monthly) To find: time to double…

Q: How long will it take for 10,000 to amount to 50,000 if the interest rate is 6% compounded annually?…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: What is the equivalent of a current deposit of $32,000.15 years from now at 8.5% interest compounded…

A: Current deposit account is a type of savings deposit with no deposit term specified. It can be used…

Q: 52. Find the interest per month of the loan at the nominal rate of 20% compounded monthly. O 1.5% O…

A: Given: Nominal Interest rate compounded monthly=20%

Q: Ben wishes his son to receive P 200,000 ten years from now. What amount should he invest now if it…

A: Answer: Ben needs to deposit P68757.82

Q: A house and lot can be acquired with a down payment of P 500,000 and a yearly payment of P 100,000…

A: Answer:- (B) 808.836

Q: Convert 16% compounded monthly to equivalent nominal rate which compounded bi-monthly.

A: i = 16% COMPOUNDED MONTHLY r = ?

Q: It is desired to accumulate $50,000 at the end of a 10-year period. What amount needs to be invested…

A: Compounding refers to a process in which interest is earned over interest. It is used to increase…

Q: • An electronic appliance is payable P1,000,12% compounded continuously. How much is the product…

A: Given Principal amount = 1000. Interest rate = 12% r = 0.12 Time = 10 years. And compounded…

Q: In order to buy an apartment unit, Meryl needs to spend a total of $300,000 today and equal monthly…

A: Total Amount spent today = 300,000 Monthly Payment = 2500 n = 26 years r = 7% compounded monthly

Q: Money is compounded annually at the rate of 6%, find the present value of a sequence of 12 semi-…

A: In the present worth method of comparison, the cash flows of each option will be decreased to time…

Q: Find the uniform annual amount that is equivalent to a uniform gradient series in which the first…

A: We have First year-end payment P1 =6800 Second year-end payment = 6550 Third year-end payment =6300…

Q: At the end of every year you deposit $2.000 into an account that earns 9% interest per year. What…

A: The Balance in the account after the 30th deposit can be calculated by the following the formula…

Q: QUESTION 9 What is the effective monthly interest rate considering an APR of 6% compounded…

A: Compounding refers to the process of adding earned interest to the principal amount of an investment…

Q: Identify the following interest rates as nominal or effective: (ABET, SO1) A: 1%= 6% per semiannual,…

A: When comparing the nominal interest rate and effective interest rate, the primary difference between…

Q: Suppose you make equal quarterly deposits of $1,000 into a fund that pays interest a rate of 16% per…

A: One of the most crucial economic concepts, FV is based on the time value of money. Investors must be…

Q: If cash flows are received on a semi-annual basis; the effective semiannual interest rate, if it is…

A: The effective interest rate is the rate that provides the actual interest or return to be earned on…

Q: On their saving accounts, Al- Rajhi Bank offers an annual interest rate of 16% nominal, Compounded…

A: Given information, Present value (p)= $22,000 Interest rate (r)= 16% Compounded period (m)= 4…

Q: Determine which of the following yields the highest effective interest? 12% compounded monthly O…

A: Effective interest rate is the annual rate at which an investment is compounded.

Q: If interest is at the rate of 8% compounded semi-annually, what sum must be invested at the en each…

A: The future worth of an annuity is the value of a group of recurring payments at a particular date in…

Q: If money is worth 9%, find the present value of a perpetuity of P20,500 payable at the beginning of…

Q: Assuming a 10 pcrcent interest rate compounded continuously, what is the present valuc of an annuity…

A: [a] Present value off annuity for the next five years:-PV = $500/[1+10%]^1 + $500/[1+10%]^2 +…

Q: If money is worth 7%, obtain the present value of a perpetuity of P64,500.00 payable annually when…

Q: For the next 15 years, you will deposit $1,500 every month in a savings account. The account pays 6%…

A: Given information: You deposit $1500 every month in a savings account for the next 15 years. The…

Q: In order to buy an apartment unit, Meryl needs to spend a total of $550,000 today and equal monthly…

A: Formula of the future value for the one time payment: F = P (1 + R/n)n*t Where: F : Future value P…

Q: Mr. and Mrs. Ramirez bought a house and lot with a down payment of P1,000,000.00 and a yearly…

A: In economics, present value refers to the current value of a future stream of cash flwo. Future…

Q: Derive the production possibilities frontier (PPF) for Home and Foreign and plot it in a graph with…

A: A production possibility frontier (PPF) shows the maximum possible output combinations of two goods…

Q: What is the nominal annual interest rate if the effective annual rate is 8.1% and compounding is…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: QUESTION 10 What is the effective Semi-annual interest rate considering a 15% APR compounded…

A: Compounding is the process of adding interest payments to the loan or investment principal and then…

Q: QUESTION 4 Suppose you invest $150.000 dollars in a savings account that earns 9% compounded…

Q: A lot in Cainta Rizal can be acquired at a down payment of P200,000 and a yearly payment of P30,000…

Q: Assume that l2t = 0.15% and that t = 0. If the one-year interest rate is 5% and the two- year…

A: Given Liquidity premium for 2 period bond at time t (l2t)= 0.15% One year interest rate at today's…

Q: Which formula is correct for the simple interest calculation? Select one: O a. F = P(1-in) O b. F=…

A: Simple interest considers the overall interest that is earned on a principal amount after a…

Q: The maintenance cost for a car this year is expected to be $500. The cost will increase $50 each…

A: Note:- Since we can only answer one question at a time, we'll answer first one. Please repost the…

Q: A perpetuity earning 4.00% compounded semi-annually is started with a $159,000.00 investment. How…

A: Investment amount = $159,000 Rate = 4% = 0.04 Withdrawal = Investment * Rate/2 = 159,000*0.04/2…

Q: If you borrowed $12,000 payable in 6 equal annual installments, what would be the principal payment…

A: Yearly Installments implies a progression of sums to be paid yearly over a foreordained time of…

Q: Find the present worth of a perpetuity of 13,000 payable every 3 months if money is worth 12%…

A: Given that, Periodic payment = 13,000 Periodic rate = 12% or 0.12

Q: An original loan of P200,000 was made at 10% simple interest per year for 4 years. At the end of…

A: Given the loan amount = P200000 The interest rate for first 4 years = 10% Interest rate for next 6…

Q: 2. Find the present worth of perpetuity of P 15,000 payable monthly if money is worth 10% compounded…

A: Given information Monthly payable amount=P15000 Annual interest rate=10% Payment period=12…

Q: What is the size of end of month payments if a mortgage of $275,000 is amortized over 25 years and…

A: * SOLUTION :-

Q: If you invest $7,000 at 10% per year, compounded continuously, how much would it be worth in five…

Question

Find the present value of a perpetuity of P5,000 payable semi-annually if money is worth 7%
compounded quarterly.
O a. P117,429.00
O b. P171,492.00
O c. P171,942.00
O d. P171,429.00

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Determine Jessa’s present worth of an annual payment of $2,500 at the end of each year for 12 years at 8% compounded annually? A. $ 12,985.57 B. $ 18,840.20 C. $ 20,347.41 D. $ 15,726.41
vishol ottelum s llachowo now olques ogrold bid omated 77 Consider the accompanying cash flow series at varying interest rates. What is the equivalent present worth of the cash flow series? 212 in Into) bluode (vloeibomii obsina inomyn Go gninaiw bift og oft niw irgo Jasaryag owl pedi lliw 9167 12 $1,800 aw 1A mue qmal adi yol baigo Traslaviupo ed لعتلة tudiuzib 1 on adi ui folo $1,200 Abu2 0263702 12 is also vratol to dne noillim 1962 to Intons blog abhi to onda on €8.S noillim 142 lo loto 4% oy done to gn a od antub yad mismox ad benvor $1,200 $1,200 6% 2A 110.8%uunil 166% 2 1000 yaniom osito z lamoteoubs a'atale si omi tugs abosoon vool si 1911A launne bobnuogmoo o to o oft is lastini Vinuroos iw oum wod. (IS soy to gninniged sdi 10) sbam nood and YP = ? 02 TUO DVB2 of wolf cidad orienoilliM" absor shilbead roqngawon A MR.S quomoo os sudbiw sihil a ebauoe il "matey vinuos? nillead rogagawon aids to 1135dl 1974 betudiazib od em od to noitudinab od
How long in years will a certain sum of money to triples its amount vhen deposited at a rate of 13% compounded monthly? O 9.50 vrs O 10.50 vrs O 8.50 yrs O 11.50 yrs - please use manual calculation thank you
Please answer the following questions and post your answers in picture please
ion If you would like to have $400000 for your retired and you save equal amount monthly in a saving account for 30 years, how much money (to the nearest dollar) should you save monthly to the account with 3.5% interest compounded monthly? O a. $671 O b. $615 O c. $663 O d. $598 O e. $630 a
You wish to have $20,000 SR in an account 6 years ftrom now. How much money must be deposited in the account now to have this amount if the account pays 7% compounded annually? O a 10925 O b. 13327 Oc NA O d. 12234 O e. 7217 Clear my choice
How long in years will a certain sum of money to doubles its amount when deposited at a rate of 4% compounded bi-monthly?
What effective interest rate per quarter is equal to the nominal 7% per month compounded continuously? Select one: O a. 5.13 O b. 22.14 О с. 7.25 O d. 23.37 О е. 16.18
You just deposited $1,500 in a bank account that pays a 6.0% nominal interest rate, compounded quarterly. If you also add another $5,000 to the account one year (4 quarters) from now and another $6,500 to the account two years (8 quarters) from now, how much will be in the account three years (12 quarters) from now? O a. $15,543.04 O b. $14,324.75 Oc. $13,195.00 O d. $13,594.06 Oe. $14,294.52
Show solution
Show solution
Show solution