You have just received a windfall from an investment you made in a friend's business. She will be paying you $11,701 at the end of this year, $23,402 at the end of next year, and $35,103 at the end of theyear after that (three years from today). The interest rate is 13.6% per year.a. What is the present value of your windfall?b. What is the future value of your windfall in three years (on the date of the last payment)?a. What is the present value of your windfall?The present value of your windfall is $. (Round to the nearest dollar.)

Present value shall be computed by discounting the cash flows at the required rate. Future value…

Answered: You have just received a windfall from…

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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ou can assume that all payments are made at the beginning of the period and use "1" for the "type" argument in the formula. A. Suppose you invest $ 11,400 today. What is the future value of the investment in 29 years, if interest at 7% is compounded annually? B B. Suppose you invest $ 11,400 today. What is the future value of the investment in 29 years, if interest at 7% is compounded quarterly? 4 5 6 27 28 29 C. Suppose you invest St $ 570 monthly. What is the future value of the investment in 29 years, if interest at 5% is compounded monthly? Question 1 Question 2 + Ready Accessibility: Investigate MAR 17 A W +
Suppose you intend to purchase a house worth $239,900 with a 30-year fixed rate mortgage. You have a down payment of 15%. (a) How much are you planning to finance? (b) Find the monthly payment needed to amortize the loan, at a rate of 2.4% compounded monthly. (c) Approximately how much of the loan will remain after 12 years?
Please assume that interest compound continuously
Linda expects to receive P35,569.22 , 9 years from now. How much should she invests for three consecutive years (annually) starting THIS YEAR if the interest rate is 0.250? Use knowledge about ANNUITIES in solving this
A person borrows an amount for a new house and s/he is going to make monthly payments of 8,000 $ for the next 10 years. The nominal annual interest rate is quoted as 12%. (Assume the first instalment is going to be paid 1 month after s/he borrows.) a. Find the amount borrowed by this person. o. How much does this credit worth at the end of the last payment date? c.lf this person decides on closing his/her loan after paying the 34th instalment, how much should s/he pay? It is given that the closing fee of this credit is 1,453 $.
ربو Suppose an investor will receive payments at the end of the next six years in the amounts shown in the table. 6 248 Ycar 1 5 4 2 3 Payment 465 233 632 365 334 If the interest rate is 3.5% compounded semiannually, what is the present value of the investment?. [Assume the first payment will arrive one year from now].
A person borrows an amount for a new house and s/he is going to make monthly payments of 8,000 $ for the next 10 years. The nominal annual interest rate is quoted as 12%. (Assume the first instalment is going to be paid 1 month after s/he borrows.) a. Find the amount borrowed by this person. b. How much does this credit worth at the end of the last payment date? c.lf this person decides on closing his/her loan after paying the 34th instalment, how much should s/he pay? It is given that the closing fee of this credit is 1,453 $.
You just opened a brokerage account, depositing $4,500. You expect the account to earn an interest rate of 8.57 % . You also plan on depositing $3,000 at thenend of years 5 through 10. What will be the value of the account at the end of 20 years, assuming you earn your expected rate of return?
1.1) For $20,000, you can purchase a five-year annuity that will pay $5000 per year for five years. The payments occur at the end of each year. a) Calculate the effective annual interest rate implied by this arrangement. 1.2) If you invest $1000 at 11% APR for five years, how much would you have at the end of 5 years? a) Calculate using simple interest. b) Calculate using compound interest.
You have just made an offer on a new home and are seeking a mortgage. You need to borrow $620,000. a. The bank offers a 30-year mortgage with fixed monthly payments and an interest rate of 0.53% per month. What is the amount of your monthly payment if you take this loan? b. Suppose you take the 30-year mortgage described in part (a). How much will you still owe on the mortgage after 10 years? a. The bank offers a 30-year mortgage with fixed monthly payments and an interest rate of 0.53% per month. What is the amount of your monthly payment if you take this loan? Your monthly payment will be $nothing. (Round to the nearest cent.) b. Suppose you take the 30-year mortgage described in part (a). How much will you still owe on the mortgage after 10 years? The remaining loan amount will be $nothing.
You have just received a windfall from an investment you made in a friend's business. He will be paying you $17,752 at the end of this year, $35,504 at the end of the following year, and $53,256 at the end of the year after that (three years from today). The interest rate is 11.7% per year. a. What is the present value of b. What is the future value of your windfall in three years (on the date of the last payment)? your windfall? a. What is the present value of your windfall? The present value of your windfall is $ (Round to the nearest dollar.) b. What is the future value of your windfall in three years (on the date of the last payment)? The future value of your windfall in three years is $ (Round to the nearest dollar.)
6. An investor is considering an investment that will pay $2,150 at the end of each year for the next 10 years. He expects to earn an annual return of 18 percent on his investment. How much should he pay today for the investment? How much should he pay if the investment returns are paid at the beginning of each year?

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