Question (2): What is the capitalized worth, when = x1% per year, of 700 per year, starting nowand continuing forever, and $10X2 in year five, repeating every four years thereafter, andcontinuing forever?X1=4%X2=700$

Present value of perpetuity (cash flow starting at end of period 1) = C/r C is recurring cash flow…

Question (2): What is the capitalized worth, when = and continuing forever, and $10X2 in year five, repeating every four years thereafter, and continuing forever? X1=4% X2=700$ x1% per year, of 700 per year, starting now

Question (2): What is the capitalized worth, when = and continuing forever, and $10X2 in year five, repeating every four years thereafter, and continuing forever? X1=4% X2=700$ x1% per year, of 700 per year, starting now

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter1: Understanding Personal Finance

Section1.4: Perform Time Value Of Money Calculations

Problem 3CC

See similar textbooks

Related questions

Q: Find the present and future value of an income stream of $6000 per year for a period of 10 years if…

A: Present value (PV), also referred to as present discounted value, signifies the current value of a…

Q: 3.20 Calculate the future worth (in year 11) of the following income and expenses, if the interest…

A: Year Time to Year 11 Cash Flow = Income - Expense 0 11 9000 1 10 600 2 9 600 3 8 600 4 7…

Q: If you invest $5,000 three years from now, how much will be in h 15 f if 10% d d ll ? the account 15…

A: Future value: This is the amount of present value accumulated or compounded at a rate of interest…

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: What is the present value (PV) of $70,000 received six years from now, assuming the interest rate is…

A: PV = FV / (1 + r / n)nt Where, PV = Present value FV = Future value r = Rate of interest…

Q: At a rate of 10.0%, what is the future value of the following cash flow stream? Years: 1 4 CFs: $0…

A: Future value is the future worth of cash flows that has occurred in the past or present.

Q: a) How much will this investment be worth after 10 years? (Round your answer to the nearest cent.) $…

A: Investment Amount = $49,000 Time period = 10 years Rate of interest = 8% compounded continuously.…

Q: How much would $1. growing at 6.8% per year, be worth after 75 years? Select the correct answer. O a…

A: We need to use future value formula below to calculate worth after 75 years.FV =PV(1+i)nWhereFV…

Q: What is the capitalized cost of $60,000 in year 0, $150,000 in year 2 and a uniform annual amount of…

A: year 0 = 60000 Year 2 = 150000 Yera 5 = 50000 per year forever.

Q: N practically speaking defines "forever!

A: *Answer:

Q: What is the present value (PV) of an investment that pays $80,000 every year for four years if the…

A: In this problem we have to calculate quarterly interest and periods and calculate future value…

Q: What is the Net Present Value of the following cash flow stream? Year Cash Flow 0 - $1,145 1 $459 2…

A: Net Present value (NPV) = Present value of positive cash flows - Present value of negative cash…

Q: Solve for the value of X in the accompanying table, so that the cash flow A is equivalent to the ca…

A: solution working note cash flow of A =8000 * pvf (8% ,2nd year) + 8000 * pvf (8% , 5th year) Refer…

Q: At what annual interest rate will $1,200 invested today be worth $2.500 in 12 years?

A: Total amount (A) = 2,500 Principal (P) = 1,200 Years (n) = 12

Q: You invest $50,000 for three years that will earn 3.6 percent compounded continuously. What will be…

A: Investment = $ 5000 Interest rate = 3.6% Compounding = continuously Period = 3 Years

Q: The value of a good rises by 13% in a year. If it was worth 6.5 million at the beginning of the…

Q: An investor has an opportunity to purchase any of the investments shown in the following table.…

A: Introduction: Return on investments (ROI) is the return or profit an investor will receive from an…

Q: What is the present value (PV) of $300,000 received seven years from now, assuming the interest rate…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: What is the present worth (P) of all the cash flows if F=16000, n36 years, and i= 8% per year?…

A: The present worth is the sum of the discounted values of the future cash flows.

Q: How much would $1, growing at 13.7% per year, be worth after 75 years? Select one: a. $18,248.03…

A: Present value (PV) = $1 Interest rate (r) = 13.7% Period (n) = 75

Q: 3. 4. How much interest on interest is earned in an account by the end of 5 years if $100,000 is…

A: To calculate the interest earned on an account with continuous compounding, we use the formula: A =…

Q: What is the present value of the accumulated amount of P7.5 million at ½%, m=4 for 2 years?

A: Discounting the future cashflows will provide Present value.

Q: Assume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual…

A: Initial Value at time 0 is $6,500Annual Income $95Value of Investment increased to $7050 in one year

Q: What amount of money invested today at 3.54% compounded monthly will have an accumulated value of…

Q: What is the IRR for a $1,075 investment that returns $190 at the end of each of the next 6…

A: Internal rate of return or IRR of a project is the discount rate which makes net present value of…

Q: What is the present value (PV) of $300,000 received five years from now, assuming the interest rate…

A: Given: Future value (FV) = $300,000 Rate of interest (r) = 9% = 0.09 Time period (n) = 5

Q: An investment pays $200 at the end of Year I. $250 at the beginning* of Year 2. $387 at the end of…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: 7. The present worth of a cash flow of $1,000 that occurs every 10 years forever, with the first on…

A: A perpetuity is a financial instrument that promises a constant and never-ending stream of cash…

Q: Calculating Future Values Compute the future value of $1,250 compounded annually fora. 10 years at…

A: We will only answer the first three subparts. For the remaining subparts, kindly resubmit the…

Q: Suppose you inherited $1,425,000 and invested it at 7.80% per year. How much could you withdraw at…

A: The objective of the question is to find out the amount that can be withdrawn at the beginning of…

Q: rate of interest, compounded annually, will result in the receipt of $15938.48 if $10000 is invested…

A: The given problem can be solved using RATE function in excel. RATE function computes interest rate…

Question

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 with 2 images

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, finance and related others by exploring similar questions and additional content below.

Similar questions

What is the present value (PV) of $300,000 received five years from now, assuming the interest rate is 9% per year? O A. $194,979 B. $243,724 C. $341,214 O D. $180,000
What is the present value (PV) of $70,000 received six years from now, assuming the interest rate is 5% per year? O A. $45,500 O B. $52,235 OC. $91,411 D. $44,400
i need the answer quickly
What is the present value (PV) of an investment that pays $80,000 every year for four years if the interest rate is 6% APR, compounded quarterly? A. $331,614 B. $276,345 C. $359,248 D. 303, 979
How much would $1, growing at 13.7% per year, be worth after 75 years? Select one: a. $18,248.03 b. $15,206.70 c. $18,704.24 d. $13,533.96 e. $15,358.76
For each of the following situations involving single amounts, solve for the unknown (?). Assume that interest is compounded annually. (i = interest rate, and n = number of years) Present Value Future Value i n1. ? $ 40,000 10% 52. $ 36,289 65,000 ? 103. 15,884 40,000 8 ?4. 46,651 100,000 ? 85. 15,376 ? 7 20
9.) What present value amounts to $15,000 if it is invested for 20 years at 6% compounded annually? (Round your answer to the nearest cent.)
What is the total future value ten years from now of $400 received in 1 year, $350 received in 2 years and $900 received in 8 years if the interest rate is 5% per year? O a $2,047.15 O b. $2,100.11 Oc $2,299.15 Od. $2,129.89 O e. $2.254.44
1. At what rate must RM50,000 to grow to 406,855 in 15 years compounded annually? Select one: a. 19% b. 20% c. 18% d. 15% 2.How long RM152,091.826 grow to RM708,900 with a 8% compounded annually? Select one: a. 12 years b. 15 years c. 20 years d. 10 years 3.If you deposit RM15,000 in an account earning 12%, how much would you have in the account after 15 years? Select one: a. RM87,869 b. RM83,456 c. RM82,104 d. RM82,879 4.If you deposit RM3,305 in an account earning 12%, how much would you have in the account after 15 years? Select one: a. RM18,090 b. RM23,456 c. RM12,879 d. RM17,869 5.If you deposit RM5,072 in an account earning 9%, how much would you have in the account after 15 years? Select one: a. RM18,474.76 b. RM17,869.90 c. RM12,879.67 d. RM23,456.89
The value of a good rises by 13% in a year. If it was worth 6.5 million at the beginning of the year, find its value at the end of the year? Select one: O a 7.345 O b. 5.7522 O c. 5752212.389 O d. 7345000 O e. None of the above
How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
Ques What is the future value (FV) of $50,000 in six years, assuming the interest rate is 4% per year? A. $53,776 B. $56,939 C. $32,500 D. $63,266