You have been awarded a Pinder Foundation scholarship to help cover your living costs while studying at the University of Melbourne. The scholarship offers a regular payment of $1,000 per month for three years with the first payment occurring in one and a half months’ time. If the relevant discount rate is 9% p.a. compounding monthly, the present value of the scholarship today is closest to: Group of answer choices A. $32,789 B. $31,446 C. $31,330 D. Need more information to answer the question E. $42,474

You have been awarded a Pinder Foundation scholarship to help cover your living costs while studying at the University of Melbourne. The scholarship offers a regular payment of $1,000 per month for three years with the first payment occurring in one and a half months’ time. If the relevant discount rate is 9% p.a. compounding monthly, the present value of the scholarship today is closest to: Group of answer choices A. $32,789 B. $31,446 C. $31,330 D. Need more information to answer the question E. $42,474

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 23E

See similar textbooks

Related questions

Q: Your grandmother is gifting you GH¢ 100 a month for four years while you attend University to earn…

A: Monthly Deposit(P) = 100 Discount Rate(r) = 5.5%/12 =0.458333% = 0.004583% Years =4 Terms(n) = 4*12…

Q: What amount of money (in Php) invested today at 11.97% interest can provide the following…

A: Please note the last payment of 55,060 will be made into perpetuity. Now let us break this question…

Q: You want to endow a scholarship that will pay $9,000 per year forever, starting one year from now.…

A: PRESENT VALUE OF PERPETUITY FORMULA: PRESENT VALUE =ANNUAL CASHFLOWRATE

Q: You are considering whether to pursue a higher degree after you finish your college study. The…

A: The Tuition fees for 2 years is 10,000 which is assumed to be paid in day 1. Monthly income will be…

Q: You have $500,000 to donate to your college. The college's discount rate is 7%. You donate the money…

A: PV= $500,000 Discount rate= 7% Time period= 10 years Future value (FV)=?

Q: To offer scholarships to children of employees, a company invests $15,000 at the end of every three…

A: Interest The percentage of the principal amount which is received by the investor or paid by the…

Q: Suppose someone wants to accumulate $65,000 for a college fund over the next 15 years. Determine…

A: Future value is the estimated value of current assets that is discounted at an assumed rate of…

Q: anscrip Suppose someone wants to accumulate $50,000 for a college fund over the next 15 years.…

A: Future value is the estimation of current value of future cash flows that are likely to be received…

Q: uppose someone wants to accumulate $55,000 for a college fund over the next 15 years. Determine…

A: We have; Amount to accumulate as $55000 Time period as 15 years Amount deposited per month is $60…

Q: A financial planning service offers a college savings program. The plan calls for you to make six…

A: The question is related to Return on Investment. The ROI is calculated with the help of following…

Q: You have been awarded a Pinder Foundation scholarship to help cover your living costs while studying…

Q: Your Company wish to establish a PhD University Scholarship of GHc 2,000 paid at the end of each…

A: Given information: Cash flow amount paid is GHc 2,000 Interest rate is 7.5% Growth rate is 3%

Q: Assume the total cost of a college education will be $325,000 when your child enters college In 18…

A: We need to use future value formula below to calculate interest rate needed to earn on deposit to…

Q: A financial planning service offers a college savings program. The plan calls for you to make six…

A: The return on investment represents the profitability of an investment and is expressed in…

Q: University tuition and fees can be paid by using one of two plans. Early-bird: Pay total amount due…

A: Equivalent Amount refers to the amount which is proportionally equal to its own value at any…

Q: The Chan family would like to establish a bursary at Camosun College. The bursary pay $2,000 to a…

A: This payment is a perpetuity, meaning that this payment will occurs indefinitely. In a perpetuity,…

Q: You intend to endow a scholarship that pays $5,000 every 6 months, starting 6 months from now. If…

A: A series of payments made at an equal interval of time for an infinite period is called perpetuity.…

Q: A financial planning service offers a college savings program. The plan calls for you to make six…

A: Annual Payment = 14000 Time Period = 6 years Beginning of period payments Future Value = Sum of…

Q: Your hard work in college paid off, quite literally, and you received a graduate assistantship for…

A: Future Value-Future value (FV) is the value of a current asset at a future date based on an assumed…

Q: You You ha ue 100,000otodonate to your college. you wantto endow aperpetual scholauship that ma kes…

A: PERPETUITY is annuity which is forever. present value of prepetuity = A/R where, A= annual payment R…

Q: he loan is 10 y onthly frequen

A: The syntax of the PMT function is: PMT (rate, nper, pv) Where rate is the interest rate. Here it…

Q: You have $400,000 to donate to your college. The college's discount rate is 6%. You donate the money…

A: The future value of any cash flow is the compounded value of all the current time zero’s deposit and…

Q: Suppose someone wants to accumulate $65,000 for a college fund over the next 15 years. Determine…

A: Annuity is that under which investor will invested / deposit equal amount for specified period at…

Q: You wish to establish a permanent scholarship at Bond University providing a worthy student with…

A: In this we have to calculate the present value of perpetuity.

Q: Pete Morton is planning to go to graduate school in a program of study that will take three years.…

A: Here,Present value of Annuity:It represents the current worth of the future cash flow stream of the…

Q: As a result of winning the Gates Energy Innovation Award, you are awarded a growing perpetuity. The…

Q: As a result of winning the Gates Energy Innovation Award, you are awarded a growing perpetuity.…

A: Here, Annuity Payment at the end of first year (CF1) is $30,000 Growth Rate in Annuity Payment every…

Q: A financial planning service offers a college savings program. The plan calls for you to make six…

A: Return on Investment can be computed as follows:

Q: In three years you plan to take a family vacation to Florida at an estimated cost of $3500. If you…

A: The amount that need to be invested today can be calculated by using the present value formula. The…

Concept explainers

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.

Question

Group of answer choices

A. $32,789

B. $31,446

C. $31,330

D. Need more information to answer the question

E. $42,474

I already calculated it and I got C ($31,330), is it true? I want to match it with my formula and the steps to solve it.

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

You have been awarded a Pinder Foundation scholarship to help cover your living costs while studying at the University of Melbourne. The scholarship offers a regular payment of $1,000 per month for four years with the first payment occurring in one and a half months’ time. If the relevant discount rate is 6% p.a. compounding monthly, the present value of the scholarship today is closest to: Group of answer choices a) $42,474 b) $31,330 c) $42,580 d) Need more information to answer the question e) $32,789
You intend to endow a scholarship that pays $5,000 every 6 months, starting 6 months from now. If the appropriate discount rate is 3% per 6-month period, how much money will you have to donate ← today to endow the scholarship? You will need to donate $ (Round to the nearest dollar.) CIT
You wish to establish a permanent scholarship at Bond University providing a worthy student with $1000 annually. If invested monies generate an 8% return, how much is needed in the scholarship fund?
What amount of money (in Php) invested today at 11.97% interest can provide the following scholarships: Php 35,389 at the end of each year for first 8 years, Php 45,100 each year for the next 8 years, and Php 55.060 thereafter? Note: Please show the complete solution with the formulas used as it is needed for my reviews. Thank You!
K Suppose someone wants to accumulate $65,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same. The person deposits $55 per month into an account with an APR of 7%. ... Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) O A. No, because the amount that will be in the college fund, $ is less than the goal of $65,000. OB. Yes, because the amount that will be in the college fund, $ is more than the goal of $65,000. 3
University tuition and fees can be paid by using one of two plans. Early-bird: Pay total amount due 1 year in advance and get a 10% discount. On-time: Pay total amount due when classes start. The cost of tuition and fees is $20,000 per year. (a) How much is paid in the early-bird plan? (b) at an interest rate of 6% per year, what is the equivalent amount of the savings compared to the on-time payment, that is, 1 year later than the early-bird plan?
To offer scholarships to children of employees, a company invests $15,000 at the end of every three months in an annuity that pays 8% compounded quarterly a. How much will the company have in scholarship funds at the end of ten years? b. Find the interest Click the icon to view some finance formulas. a. The company will have sin scholarship funds (Do not round until the final answer. Then round to the nearest dollar as needed.)
Aronscript Suppose someone wants to accumulate $50,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same. The person deposits $140 per month into an account with an APR of 6% Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed) is less than the goal of $50,000. A. No, because the amount that will be in the college fund, $ OB. Yes, because the amount that will be in the college fund, S is more than the goal of $50,000
A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $16,800 each, with the first payment occurring today, your child’s 12th birthday. Beginning on your child’s 18th birthday, the plan will provide $35,000 per year for four years. What return is this investment offering? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You You ha ue 100,000otodonate to your college. you wantto endow aperpetual scholauship that ma kes its 1stpayment in 1 year, Ifthe Colleses discount 4%0 how large will the annual scholarshie payment be? Round tothe nearest dollar
A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $14,000 each, with the first payment occurring today, your child's 12th birthday. Beginning on your child's 18th birthday, the plan will provide $25,000 per year for four years What retum is this investment offering? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g, 32.16.) Return 0% References eBook & Resources Worksheet Section: 4.3 Compounding Periods Difficulty: 3 Challenge Section: 4.4
A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $14,000 each, with the first payment occurring today, your child's 12th birthday. Beginning on your child's 18th birthday, the plan will provide $25,000 per year for four years What retum is this investment offering? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g, 32.16.) Return 0%