Write the solution including the CASH FLOW DIAGRAM What lump sum of money must be deposited into a bank account at present time so that $1,500 per semi-annualcan be withdrawn for 10 years, with the first withdrawal scheduled for five years from today? The nominal interestrate is 12% per year compounded quarterlyA $17,080B $10,033$9,457D $12,025

In this we have to calculate present value of cash flow withdrawal.

What lump sum of money must be deposited into a bank account at present time so that $1,50 can be withdrawn for 10 years, with the first withdrawal scheduled for five years from today? TI rate is 12% per year compounded quarterly A $17,080 B) $10,033 c $9,457 $12,025

What lump sum of money must be deposited into a bank account at present time so that $1,50 can be withdrawn for 10 years, with the first withdrawal scheduled for five years from today? TI rate is 12% per year compounded quarterly A $17,080 B) $10,033 c $9,457 $12,025

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 31P

See similar textbooks

Similar questions

You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
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
What lump sum of money must be deposited into a bank account at the present time so that $600 per month can be withdrawn for give years, with the first withdrawal scheduled for six years from today? The interest rate is 1/4% per month. (Hint: There are 60 monthly withdrawals and they begin at the end of the month 72 the lump of money should be $?
What amount of money must invert in a bank that pay the 25 % annual, capitalizable monthly, with the objective of get, to the final of three years, the addition of $3,000 000.00? Which would is amount Yes the rate it is capitalizable semi-annually?
1. Determine the present equivalent value of P5,000 paid every 3 months for period of seven years and the rate of interest is 12% compounded quarterly. 2. If P25, 000 is deposited now into a savings account that earns 6% per year, what uniform annual amount could be withdrawn at the end of each year for ten years so that nothing would be left in the account after the 10th withdrawal? 3. An individual is borrowing P100, 000 at 8% interest compounded annually. The loan is to be repaid in equal payments over 30 years. However, just after eight payment is made, lender allows the borrower to triple the payment. The borrower agrees to this increase payment. If the lender is still charging 10% per year, compounded annually, on the unpaid balance of the loan, what is the balance still owed just after the 12th payment is made? 4. A loan of P10, 000 is to be repaid over a period of eight years. During the first four years, exactly half of the loan principal is to be rapid (along with the…
Future values For the case shown in the following table, calculate the future value of the single cash flow deposited today and held until the end of the deposit period if the interest is compounded annually at the rate specified. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) The future value is $. (Round to the nearest cent.) Single cash flow $5,500 Interest rate 9% Deposit period (years) 14
Given below are the future value factors for 1 at 10% for one to five periods. Interest is compounded annually at 10%. Periods Future Value of 1 at 10% 1 1.100 2 1.210 3 1.331 4 1.464 1.611 What amount will be in a bank account three years from now if $10600 is invested each year for four years with the first investment to be made today? ($10600 x 1.331) + ($10600 x 1.210) + ($10600 x 1.100) + $10600 ($10600 x 1.100) + ($10600 x 1.210) + ($10600 x 1.331) + ($10600 x 1.464) $10600 x 1.464 x 4 $10600 x 1.100 x 4
What lump sum of money must be deposited into a bank account at the present time so that $500 monthly can be withdrawn for five years, with the first withdrawal scheduled for six years from today? Interest is 9% compounded quarterly. Show cashflow diagram and complete solution.
If K40, 000 is deposited at the end of each half year in an account that earns 6.2% compounded semiannually, how long will it be before the account contains k1, 200, 000? b. When you establish a sinking fund, which interest rate is better? Explain.i. (a) 10% (b) 6% ii. (a) 12% compounded monthly (b) 12% compounded annuallyc. If k2500 is deposited at the end of each quarter in an account that earns 5% compounded quarterly, after how many quarters will the account contain k80, 000?d. A lottery prize worth k 2,400,000 is awarded in payments of k 20,000 at the beginning of each month for 20 years. Suppose money is worth 7.8%, compounded monthly. What is the real value of the prize?e. A couple who borrow K90, 000 for 30 years at 7.2%, compounded monthly, must make monthly payments of K610.91. (a) Find their unpaid balance after 1 year.(b) During that first year, how much interest do they pay?f. The first term of a GP represents the number of tins of beans sold in Food Lovers the week before…