ou iust invested 549.000 that you received as an insurance settlement. How much more will this account be worth in 40 years if you earn an average return of 7.6 percent rather than 7.1 p annual compounding) O $59,818.92 O $98,509.16 O $140,423.33

Q: A perpetuity has a PV of $25,000. If the interest rate is 11%, how much will the perpetuity pay…

A: A perpetuity is a cash flow that goes on forever. In other words the time period for a perpetuity is…

Q: fane has $1L025 and plan to purchase a 5-year certificate of degosit KD tht y interest, conmpounded…

A:

Q: Today, Thomas deposited $130,000 in a three year, 4% investment account that compounds quarterly…

A: Future value means the future worth of the money received or paid today. The future value is…

Q: If $8,000 is invested in a certain business at the start of the year, the investor will receive…

A: The present value of a business opportunity is the current worth of potential future cash flows or…

Q: An account earning 3.2% annual interest contains 1 million dollars. If a fixed amount of money is…

A: Time has been precious in all perspectives, however in terms of finance; the time has a monetary…

Q: You made an investment of $8,500 into an account that paid you an annual interest rate of 4.2…

A: Given information: Initial value of investment (V0) = $8,500 Annual interest rate for first "eight"…

Q: What amount of money deposited 70 years ago at 3% interest would provide a perpetual (i.e. infinite…

A: Perpetual Amount Formula = Annual Amount/ Interest rate  Annual Amount = $ 23,000 Interest Rate = 3%…

Q: If you put up $30,000 today in exchange for a 6.50 percent, 15-year annuity, what will the annual…

A: A series of fixed payments that are paid or received at an equal time interval is term as the…

Q: if $875 000 is saved for retirement, what rate of interest, compounded semi-annually, will provide…

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

Q: Answer the following time value of money questions assuming the interest rate is 5 percent. a. What…

A: Present Value is the current price of future value which will be received in near future at some…

Q: Assume you invest $1 000 at the end of this year, at the end of the second year, and at the end of…

A: Annual deposit for 3 years = $ 1000 Annual interest rate = 5% Future value period = 4 Years

Q: Present Value of a Perpetuity What's the present value, when interest rates are 6.70 percent, of a…

A: The quantity of the regular cash flows is simply divided by the discount rate to get the present…

Q: Mr. Chips, Inc. wishes to accumulate $1,200,000 to be used to pay off a balloon note at the end of 5…

A: The present value formula is used to compute the today’s value of $1 being paid or received in the…

Q: You invest $1,900 three years from today and $1,100 four years from today. How much will you have in…

A: Finance is the management of money. The time value of money principle explains that a dollar today…

Q: The monthly premium on a five-year insurance policy is $25 payable in advance What is the economic…

A: Formula: Future value = Present value x ( 1 + r )N Present value gets multiplied with rate of…

Q: An insurance policy pays $50,000 immediately or $4,000 every 6 months for 10 years beginning now.…

A: Interest rate refers to the charge at which the loan is to be provided by the lender to the borrower…

Q: How much would $9,00o t8 be received at the end of 50 years be worth today if the rered rate of…

A:

Q: 15. Helen Barns wishes to purchase a new home and borrows $389,000 with a repayment plan of 25…

A: Step 1: The calculation of the annual payment  AB1Borrowings (PV) $3,89,000.00 2Years (N)253Interest…

Q: What is the present value of an annuity that pays $58 per year for 13 years and an additional $1,000…

A: PMT = 58 Period = 13 years  Nominal rate of interest = 7.23% Additional amount = 1000

Q: What is the present value (PV) of $40, 000 received ten years from now; assuming the interest rate…

A: The objective of this question is to calculate the present value of a future sum of money. In this…

Q: You purchase a home for $207,000 that you expect to appreciate 8% in value on an annual basis. How…

A: Future Value = Present Value * (1+r)^nWhere,r = rate of interest per periodn = no. of compounding…

Q: Acme Insurance is offering you a perpetuity that will pay you and your heirs $150,000 per year. If…

A: A perpetuity is a type of financial instrument or investment that provides a fixed stream of cash…

Q: Which comes closest to the future value of $875 to be received at the end of 7 years, if the amount…

A: Solution:When some amount is invested somewhere, it earns interest on it.The amount initially…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.