Scotia Bank Ltd. promises to pay 2.75% in the first year, 3.25% in the second year, 3.75% in the third year, and 4.00% in the fourth and final year if you make an investment of $15,000 in this promotion and hold it to maturity. What will be your total investment at the end of the four years? (Rounded to the nearest hundreds

Q: Jesaki Bank offers a 10-year CD that earns 2.3% compounded continuously. If $12,508 is is invested…

A: $12,508 is invested in a CD for 10 years that earns 2.3% compounded continuously. We have to…

Q: An investment promises two payments of $610, on dates four and eight months from today. If the…

A: Lets understand the basics.Value of investment is calculated by discounting payments receivable at…

Q: Jesaki Bank offers a 10-year CD that earns 2.5% compounded continuously. If $12,426 is is invested…

A: Future value in case of continuous compounding = P X e ^(r x t)whereP = Principal amount = initial…

Q: An investment will return $125 at the end of each month for 5 years and then $250 at the end of each…

A: Value at the end of 5 years of $250 received for next 3 years every month, can be calculated as…

Q: You are deciding between two mutually exclusive investment opportunities. Both require the same…

A: Given:   Cost of capital 6.60%     Growth rate 2.30%   Year Particulars Investment A…

Q: A firm is scheduled to receive payment of $32,000 in 1 year. What is the present value of this…

A: To calculate the present value of payment that will receive after 1 year we will use the below…

Q: GHA Co. made an investment of $10,000 and from this it will receive $800 annually for the next 18…

A: The present value of the annuity factor is used when there is an equal series of cash flows and the…

Q: How much is the sum of the present value of the expected return over those periods

A: Cash Flows (Year 1-10) (CF) =  $15,000 per year Annual interest rate (r) = 5% Time Period (t) = 10…

Q: The initial cost of an investment is $65,000 and the discount rate (cost of capital) is 12%. The…

A: Initial Cost = i = $65,000Discount Rate = r = 12%Cash Flow per Year = c = $16,000Time = t = 8 Years

Q: Kunkle Company wishes to earn 10% annually on its investments. If Kunkle makes an investment that…

A: First of all we need to compare the future value with the initial investmet .If the future value is…

Q: A firm is scheduled to receive payment of $68,000 in 2 years.  What is the present value of this…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: years from today, and 2,000 four years from today. What will the value of your account be 4 years…

A: The future value is the estimated value of an investment that accounts for compound interest or…

Q: An investment account offers a 12% annual return. If $50,000 is placed in the account for two years,…

A: Compound Interest is the interest earned on the interests previously earned.It is a method of…

Q: A $90,000 investment is made at t=0, and returns are realized over a 5-year period. A return of…

A: The present value of money refers to the concept that a dollar received in the future is worth less…

Q: Saint​ Mary's is offered a​ contract, which requires an immediate investment of​ $25 million. The…

A: Rate of return means how much returns are being earned on investments of the company. This means how…

Q: engineering company expects to expand its plant facilities in 6 years at an estimated cost of…

A: a) Solved using Financial Calculator  N = 6 years * 4 = 24 I/Y = 10%/4 = 2.5% FV = 68,000 CPT PMT =…

Q: You are deciding between two mutually exclusive investment opportunities. Both require the same…

A: Given Initial investment is $10.3 million Cash inflows of A is $2.17 million Cash inflows of B is…

Q: The initial cost of an investment is $60,000 and the discount rate (cost of capital) is 8%. The…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: ou have invested 7 million dollars for a horizon of 24 months. You will be paid interest at 7.80%…

A: Future value refers to the value of the current asset on some future date based on the growth…

Q: If Quail Company invests $50,000 today, it can expect to receive $10,000 at the end of each year for…

A: Net Present Value = Present value of cash inflows + Present value of salvage value - Initial…

Q: You invest $10,000 into a money market account that pays interest on a semi-annual basis (e.g.,…

A: We use NPER function in excel by taking present value as 10000 and future value as 20000 and…

Q: An investment company wants to establish a sinking fund to pay off debts of $85 million which come…

A: Formulas: Future value = amount*((1+rate)^years - 1) / Rate

Q: An investment promises two payments of $700, on dates two and four months from today. If the…

A: The present value is the current value of future cash flows. Investors and money lenders use this…

Q: A firm is scheduled to receive payment of $32,000 in 2 years.  What is the present value of this…

A: Present value of future cash flow can be calculated as follows: = Future Value/ (1 + rate)^number of…

Q: If TNT Corp.invests $50,835 now and it will receive $100,000 at the end of 10 years, what annual…

A: The time value of money (TVM) is the idea that an amount of money is worth more right now than it…

Q: ou are deciding between two mutually exclusive investment opportunities. Both require the same…

A: IRR is the discount rate that causes NPV = 0. NPV is the net of the present value of cash outflows…

Q: Microsoft Co. places 150,000 in an investment that has a return of 8%.     The investment is placed…

A: given, PV = 150,000 r=8% n = 12 years withdrawal year = 6

Q: A company is considering an investment expected to yield $70,000 after six years. If this company…

A: Present value: It can be defined as today’s value of the sum of money that will be received by the…

Q: If Quail Company invests $46,000 today, it can expect to receive $12,000 at the end of each year for…

A: Net present value method is used to evaluate the investment projects. We can evaluate the project by…

Q: You are told that if you invest $10,900 per year for 12 years (all payments made at the end of each…

A: Annual Payment = pmt = $10.900Time = nper = 12 YearsFuture Value = fv = $670,000Present Value = pv =…

Q: are deciding between two mutually exclusive investment opportunities. Both require the same initial…

A: IRR and NPV are two popular methods of capital budgeting analysis and choosing the best project.

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.