You are given two options: Option 1: 2,000 dollars cash on January 1st Option 2: 150 dollars on January 1st and then 100 dollars each month for twenty months beginning on February 1st I) II) What monthly IRR are both options the same? What option would you pick if the monthly rate of return is 0.80%?

You are given two options: Option 1: 2,000 dollars cash on January 1st Option 2: 150 dollars on January 1st and then 100 dollars each month for twenty months beginning on February 1st I) II) What monthly IRR are both options the same? What option would you pick if the monthly rate of return is 0.80%?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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If you have this offer "you will invest $200 per month for the first 45- months, where the first payment at the end of the first month. After that, you will receive $10,000 cash at the end of month 48. Which of the following equations to calculate the IRR for this offer is False? O a. $10,000 (P/F, i%, 48) (A/P, 1%, 45) = $200 ion O b. $200 (F/A, 1%, 45) (F/P, i%, 3) = $10,000 O c. $200 (P/A, 1%, 45) (F/P, 1%, 48) = $10.000 O d. $10,000 (P/F, i%, 48) (A/P, 1%, 3) = $200
Suppose you have a student loan of $25,000 with an APR of 12% for 20 years. Complete parts (a) through (c) below. a. What are your required monthly payments? The required monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.) b. Suppose you would like to pay the loan off in 10 years instead of 20. What monthly payments will you need to make? The monthly payment required to pay off the loan in 10 years instead of 20 is $ (Do round until the final answer. Then round to the nearest cent as needed.) c. Compare the total amount you'll pay over the loan term if you pay the loan off in 10 years versus 20 years. Total payments for the 20-year loan = $ Total payments for the 10-year loan = $
You have the option to receive $5,000 one year from now or $4,500 today. If the discount rate is 10%, which option should you choose to maximize your present value? Receive $5,000 one year from now Receive $4,500 today
Please look at the image
Suppose you're offered the following two accounts to invest $10,000 for 5 years: 11% simple interest and 6% interest compounded monthly. Which is the best choice? Part: 0 / 3 Part 1 of 3 The future value of $10,000 using 11% simple interest is $ X Ś Round your answer to the nearest cent. Do not round any intermediate steps.
Suppose you have a student loan of $35,000 with an APR of 6% for 40 years. Complet parts (a) through (c) below. a. What are your required monthly payments? The required monthly payment is $ 192.57 (Do not round until the final answer. Then round to the nearest cent as needed.) b. Suppose you would like to pay the loan off in 20 years instead of 40. What monthly payments will you need to make? The monthly payment required to pay off the loan in 20 years instead of 40 is $. (Do not round until the final answer. Then round to the nearest cent as needed.)
1. If you receive $176 each month for 12 months and the discount rate is 0.04, what is the future value? (show the process and can use financial calculator)
You have a choice between receiving $500 now and $530 in six months' time. Current interest rates are 10% p.a. (simple interest). As a rational investor, which option would you choose and why?
Consider the following three options: (1) receive a one-time payment $102 now, (2) receive a one-time benefit of $115 in 5 years (from now), (3) receive $2 every year forever. If the yearly discount rate is 2%, which option would yield the most revenue? O option 3 O option 2 O option 1 O options 1 and 3
You purchase an annuity that will pay you $100 every three months for five years. The first $100 payment will be made as soon as you purchases the investment. If your required rate of return is 9% , how much should you be willing to pay for this investment? Group of answer choices $1,596.82 $1,632.29 $1,759.34 $1,510.46
You are thinking about purchasing an investment from Get-Rich-Quick Investmemnt company. If you buy the investment, you will receive $50 every month for five(5)years. Payment will be made at the end of each month. If your required rate of return is 9% how much should you be willing to pay for this investment? Group of answer choices $4,632.87 $2,735.25 $2,525.10 $2,408.67

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