Answered: What is the present value of a property…

What is the present value of a property now if its future value is predicted to be $7,500,000 at the end of 20 years, assuming a discount rate of 4.5% per year (compounded monthly)?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: You plan to invest $50,000 today at an annual interest rate of 12% over 5 years. What the future…

A: Following details are given in the question: Present value (Investment today) = $50000 time period =…

Q: What is the future value of a property at the end of 5 years whose present value is currently…

A: Future Value is the value at some future time of a present amount of money, or a series of payments,…

Q: What present value amounts to $15,000 if it is invested for 20 years at 8% compounded annually?…

A: Present Value = Future value / (1+r)^n Where, r = rate of interest i.e. 8% n = no. of years i.e. 20…

Q: What is the value today of $1,500 per year, at a discount rate of 9 percent, if the first payment is…

A: The concept of money's time value reveals that any sum of money is worth more currently, than what…

Q: What is the future value (FV) of $55,000 in twenty-five years, assuming the interest rate is 13% per…

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

Q: At what annual interest rate, compounded annually, would $500 have to be invested for it to grow…

A: FV = A * (1+r)nwhereFV = future valueA = amount investedr = interest raten = time period

Q: What is the present value if $200 to be received 8 years from now if money in hand can be invested…

A: present value if $200 to be received 8 years from now if money in hand can be invested at 12% can be…

Q: How much should an investor pay to receive $12,000 three years (36 months) from now, assuming that…

A: RETURN 9%/12 0.75% NPER (n) 36 PMT 0 FUTURE VALUE 12000 Return= Rate

Q: An investment product promises to pay $500 at the end of the fifth year (year 5), and the payment…

A: Perpetuity:It shows the present value of the cash flows which are payable at equal intervals…

Q: A. Assume that you have $7500 to invest. You plan to invest it for 10 years at a rate of 7% per…

A: Future Value = Present Value * (1 + Interest Rate)^Time

Q: What is the future value of an ordinary annuity of $1,000 per year for 9 years compounded at 10…

A: Given: Annual cash flow (A)=$1000 Number of years (n) =9 years Interest rate(r) = 10% = 0.10

Q: An asset is projected to generate 14 annual cash flows of $6,000 starting 5 years from today. If the…

A: Present Value: It represents the current worth of the future expected cash flows. It is computed by…

Q: What is the value today of receiving $2,506.00 per year forever? Assume the first payment is made…

A: Present value refers to the discounted value of the future cash flows at the discounting rate for…

Q: What is the future value of a 6%, 10-year ordinary annuity that pays $200 each year? If this were…

A: The future value of annuity is calculated using the formula below:

Q: present value of $65,000 in six years, if the relevant interest ra

A: Present value is the equivalent today of the future cash flow based on the time and interest rate of…

Q: The present value of $100,000 that are expected at the end of one year, at an interest rate(discount…

A: We need to use present value formula below to calculate present value of expected future…

Q: is the rate of return on an investment of $9210 if the investor will recieve $2000 each year for the…

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

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: What is the present value of $200 per year, at a discount rate of 18.25 percent, if the first…

A: Annuity Amount is $200 Discount Rate (r) is 18.25% First Payment is received is 6 years from now…

Q: What is the future value of a property at the end of 12 years whose present value is currently…

A: To calculate the future value we will use the below formula Future value = PV*(1+(r/m))(n*m)…

Q: ay you $99,000 in 15 years. If the appropriate discount rate is 6.7 percent compounded quarterly,…

A: The given problem can be solved using PV and EFFECT function in excel. PV function computes present…

Q: What is the future value of a stream of $800 annual payments worth to the investor at the end of 10…

A: The FV of an investment refers to the cumulative worth of the investment's cash flows at a future…

Q: What is the future value (FV) of $50,000 in thirty years, assuming the interest rate is 13% per…

A: The objective of this question is to calculate the future value of an investment of $50,000 over a…

Q: At an interest rate of 11%, what is the present value of an asset that produces $2,400 a year in…

A: Data given: Cash flow=$2400 Rate=11%

Q: What is the present value of aperpetuity of $50 per year if theannual interest rate is 10% andthe…

A: The objective of this question is to calculate the present value of a growing perpetuity. A…

Q: What is the value today of $3,200 per year, at a discount rate of 10 percent, if the first payment…

A: First, we calculate the present value in year 5 of the annuity and then once again calculate the…

Q: will receive $1000 two years from today, and at the end of each subsequent year, you will receive an…

A: In perpetuity there are payments forever and there is no break of the payments in perpetuity.

Q: How much is an asset with expected annual cashflows of $19,000 for 11 years worth today, if the…

A: Present value considers the time value of money concept. It considers the discounting factor at…

Q: An investor plans to invest $500 a year and expects to get a 10.5% return. If the investor makes…

A: Formula to be used, PV = P[1-(1+r)^-n]/r where, PV=Present value P=Principal amount r=Rate of…

Question

What is the present value of a property now if its future value is predicted to be $7,500,000 at the end of 20 years, assuming a discount rate of 4.5% per year (compounded monthly)?

Expert Solution

Step 1

Present value shows that the sum of money worth more today as compared to tomorrow. Numerous financial applications require an understanding of present value, including determining how to value pension obligations, whether to invest in fixed assets, and which sort of investment to choose, etc.

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

What is the value today of $1,200 per year, at a discount rate of 6 percent, if the first payment is received 7 years from now and the last payment is received 22 years from today?
What is the present value of $250,000.00, 10 years from now @ 6%?
What is the future value of $8,000 a year for 40 years at 11.8 percent interest, compounded annually?
What is the present value of a perpetuity of $17 per year growing at 2 percent per year with a discount rate of 10 percent?
if 10, 000 is invested in a certain business at the start of the year, the investor will receive 1, 000 at the end of each of the next 7 years. What is the present value of this business opportunity if the interest rate is 5% per year?
If the present value of $500 expected to be received three years from today is $200, what is the discount rate?
Suppose you wish to have $15,250 in 18 years. Use the present value formula to find out how much you should invest at 6% interest, compounded annually in order to have $15,250, 18 years from now.
What is the present value of $150,000 to be received 8 years from today if the discount rate is 11 percent?
What is the present value (PV) of $30,000 received thirty years from now, assuming the interest rate is 12% per year?
What is the present value of a property now if its future value is predicted to be $9,500,000 at the end of 10 years, assuming a discount rate of 6.5% per year (compounded annually)?
What's the future value of $15,000 after 5 years if the appropriate interest rate is 14.75%, compounded annually?