Your friend sweetens the deal, and offers you $2,000 in 5 years with 3.5% interest payments every year. What is the fair price to pay today for this promise if you expect to earn 4.5% from the deal?   Group of answer choices 1. $1,912 2. $1,822 3. $1,605 4. $1,977

Q: You are approved for a $200 000 mortgage to purchase a house. You are given two options, both with…

A: Two loans are identical except that one is paid bi-weekly (in every 2 weeks, hence 2 times in a…

Q: In exchange for a RM20,000 payment today, you are allowed to choose one of the alternatives below.…

A: PV = FV / (1 + r / n)nt Where, PV = Present value FV = Future value r = Rate of interest…

Q: You have the opportunity to purchase a security that will pay you $100,000 when it matures in three…

A: Solution:Rate of return refers to the return earned by the investor on per annum basis.So, rate of…

Q: Enter your search term You want to buy a $165,000 home. You plan to pay 20% as a down payment, and…

A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…

Q: You just inherited some money, and a broker offers to sell you an annuity that pays $19,245 at the…

A: Present value (PV) could be a budgetary concept utilized to decide the current worth of future cash…

Q: If you put up 23,000 today in exchange for a 6 percent, 10-year annuity, what will the annual cash…

A: Invested Amount = $ 23000Interest Rate = 6% Compounded AnnuallyPeriod = 10 YearsAnnual Cash Flow = ?

Q: payment occurs in year 1, the interest rate is 10% and the present value at year zero for the…

A: Present value The value of future money at the present is known as the present value of money. The…

Q: Bill Swill decides to try his luck at Powerball where the projected winnings are $12,000,000. If he…

A: Given in the question:Interest Rate = 8%Time Frame = 20 YearsAmount of Winnings = $12,000,000In…

Q: You are offered the right to receive $2,000 per year forever, starting in one year. If your discount…

A: Annuity that offered to pay some amount forever is called perpetuity. The worth of offer would be…

Q: A retirement plan provides its enrollees with two options. Option 1 provides participants with…

A: A discount factor is a monetary concept that is used to calculate the present value of cash flows or…

Q: I# Khaled can deposit $220 at the beginning of each of the 15 years, using interest at 7% per year,…

A: Future value is the value of a current asset or investment at a future date. Future value is…

Q: Your brother has offered to give you either $60,000 today or $120,000 in 10 years. If the interest…

A: When an amount is receivable, every person will choose to receive higher amount. So, in the given…

Q: onpeu6 after graduation. Assume money could be invested at 8% compounded quarterly (Use Table

A: The formula for calculating the PV of a project is PV = A×1-1(1+i)ni where, A is the annual payment,…

Q: You estimate that you will need sh 80,000 in eight years, and currently you have sh 35000 at what…

A: Multiple question has been posted and for question 2, the interest rate is missing. Hence, first…

Q: You have $5000 you want to invest for the next 45 years. You are offered an investment plan that…

A: In this question, we are required to determine the future value after 45 years.

Q: What is the value today of $2,000 per year, at a discount rate of 7 percent, if the first payment is…

A: Present value is an estimate of the present value of future cash values that may be received at a…

Q: The present value of $6,000 you will receive 3 years from today is $5,333.98, assuming a 4% interest…

A: We will use the concept of time value of money here. As per the concept of time value of money the…

Q: 2. Alexander borrows P50,000 from Caden. Caden offers him two options for the interest: a. Ordinary…

A: Given: Borrowed amount =P50,000 Ordinary interest rate=3% Days for ordinary  interest = 600 Exact…

Q: 21. A friend lends you P500 for a year with 3% interest. How much interest will your friend earn?

A: Interest can be computed using the formula given below. Interest = Principle x Rate x Time

Q: Congratulations you just won the Colorado Lotto!!! The cash flows below are related to the yearly…

A: Data given: Year               Annuity 1-10              200 11-15            300 16-20…

Q: You are opening an investment account that will earn 6.5% compounded annually.  You will invest…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: If you put up $29,000 today in exchange for a 7.25 percent, 13-year annuity, what will the annual…

A: An annuity refers to a payment series that is provided in exchange for a lump sum payment. It is…

Q: You will receive $5,500 in 2 years. When you receive it, you will invest it for 4 years at an…

A: Formula:- F = A (1+r)n where , F = future value A = initial investment r = interest rate n = time…

Q: Acme Insurance is offering you a perpetuity that will pay you and your heirs $150,000 per year. If…

A: A perpetuity is a type of financial instrument or investment that provides a fixed stream of cash…

Q: Suppose you won a lottery 600000 interest of 0.05 percent, they offered you many choices the first…

A: The question gives the following information: Lottery price=600,000Interest rate=0.05%

Q: You are considering purchasing an investment contract that will eventually pay you $4,000 per year…

A: Present value refers to the money present today being more valuable than the money will receive in…

Q: You have $100,000 to invest today. At 5 percent per year, what s the end of each year, for a period…

A: Amount invested = $100,000Interest rate = 5%Amount to be withdrawn at the beginning of each year for…

Q: WITH COMPLETE SOLUTION 1. Diego wants to loan P90,000 to the bank to buy a motorcycle. The following…

A: A loan indicates the funds borrowed either for personal use or investment in the business. The funds…

Q: You have the opportunity to purchase a perpetuity which pays $5,000 annually forever. If you require…

A: A perpetuity is a stream of fixed periodic cash flows ( annuity) of infinite duration

Q: You are offered the following combinations of payments: Čombination A: $3 today, $1.1 one year later…

A: Investments are the methods through which an individual or a company invests money and funds in…

Q: You have a client that plans to put $100,000 into a brokered 5‐year CD with you. You see two 5‐year…

A: Here,ParticularsEast CoastWest CoastDeposit amount (PV) $1,00,000 $  1,00,000Time period…

Q: b. Suppose that you are given two options to choose. Offer A offers you a monthly payment of $10,000…

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type])…

Q: ow much money will you have 13 years from now?

A: Future Value: It is computed by the product of the present amount and the future value factor.  It…

Q: a. Advance payments of $25,000 every six months for 5 years b. Payments of $9,000 quarterly for 4…

A: Present value is the concept of the time value of money. Which states future cash flow is less…