What is the future value in 10 years of 1,500 payments received at the end of each year for the next 10 years? Assume an interest rate of 8%. * 25,260 23,470 O 21,730 18,395 O 15,000
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- You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity(1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?
- What is the present value annuity due of RM2,000 with a 10 percent discount rate for 10 years? Select one: a. RM13,518.12 b. RM27,126.590 c. RM18,318.345 d. RM14,093.15What is the future value annuity due of RM32,000 for the next 10 years with a discount rate of 8%? Select one: a. RM413,090.78 b. RM415,879.09 c. RM500,636.16 d. RM413,790.89g What is the future value of an ordinary annuity of S10 compounded at 10 percent? What would be the future value if it were an an- nuity due? h. You have just borrowed $100,000, and you agree to pay it back over the next 25 years in 25 equal end-of-year payments plus 10 percent compound interest on the unpaid balance. What will be the size of these payments? LWhat is the present value of a $1,000 perpetuity discounted back to the present at 8 percent? 000 per year for 7 years
- What is the future value of an ordinary annuity of $2,000 for 4 years, if interest rates are 6 percent ? Answer: Future Value of Annuity is $8749.23 Qusetion: What is the future value of the same annuity due?t What is the present value of an ordinary annuity of $1,000 per year for 7 years discounted back to the present at 10 percent? What would be the present value it it were an annuity due?What is the future value of an ordinary annuity that pays $4,600 per year for 4 years? The appropriate interest rate is 7 percent. Answers: a. $10,000 b. $6,452 c. $20,423.74 d. $4,657 An investment will pay $600 at the end of each of the next 2 years, $700 at the end of Year 3, and $1,000 at the end of Year 4. What is its present value if other investments of equal risk earn 6 percent annually? Answers: a. $1,134 b. $5,324 c. $2,345.50 d. $2,569.77 *PLEASE SHOW ALL STEPS! CANNOT USE EXCEL TO SOLVE! CAN USE CALCULATOR FUNCTIONS!!
- How much would $5,000 due in 10 years be worth today if the discount rate were 5.5%? a. $2,722.25 b. $3,395.50 c. $3,102.78 d. $2,575.89 e. $2,927.15What is the PV of an ordinary annuity with 10 payments of $7,900 if the appropriate interest rate is 5.5%? a. $59,547.24 b. $47,637.80 c. $55,378.94 d. $57,760.83 e. $48,233.27You want to buy a new sports car 3 years from now, and you plan to save $9,100 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much will you have just after you make the 3rd deposit, 3 years from now? a. $34,205.61 b. $31,331.18 c. $33,630.72 d. $28,744.21 e. $23,282.81You plan to invest in bonds that pay 6.0%, compounded annually. If you invest $10,000 today, how many years will it take for your investment to grow to $45,000? a. 31 years b. 32 years c. 30 years d. 19 years e. 26…Ordinary annuity that pays $1,000 at the end of each of the next 5 years if the interest rate is 15%. Inputs: PMT = $1,000 N = 5 I/YR = 15% PV = $3,352.16 FV= $6,742.38 How would the PV and FV of the above annuity change if it were an annuity due rather than an ordinary annuity? PV annuity due = ?Exactly the same adjustment is made to find the FV of the annuity due. FV annuity due = ?The present value of an annuity stream of $100 per year is $920 when valued at a 10% rate. By approximately how much would the value change if these were annuities due? A. An increase of $10 B. An increase of $92 C. An increase of $100 D. Unknown without knowing number of payments