
To determine: The number of periods of investment
Introduction:
The

Answer to Problem 5QP
The number of periods is as follows:
Particulars |
Present value |
Years |
Interest Rate |
Future value |
Investment A | $560 | 10.35 | 9% | $1,389 |
Investment B | $810 | 8.46 | 10% | $1,821 |
Investment C | $18,400 | 17.56 | 17% | $289,715 |
Investment D | $21,500 | 21.44 | 15% | $430,258 |
Explanation of Solution
Given information:
Investment A has a
Investment C has a present value of $18,400, future value of $289,715, and an interest rate of 17 percent. Investment D has a present value of $21,500, future value of $430,258, and an interest rate of 15 percent.
Formula:
Derive the formula to calculate the number of periods from the present value equation as follows:
The formula to calculate the number of periods:
Where,
“t” refers to the number of years or periods of investment
“ln” refers to the log value
“FV” refers to the future value
“PV” refers to the present value
“r” refers to the simple rate of interest
Compute the number of periods for Investment A:
Hence, the number of periods of Investment A is 10.35 years.
Compute the number of periods for Investment B:
Hence, the number of periods of Investment B is 8.46 years.
Compute the number of periods for Investment C:
Hence, the number of periods of Investment C is 17.56 years.
Compute the number of periods for Investment D:
Hence, the number of periods of Investment D is 21.44 years.
Want to see more full solutions like this?
Chapter 5 Solutions
Fundamentals of Corporate Finance Standard Edition
- Could you help explain, what is the complete salary survey analysis, and ensuring the data is relevant and up-to-date? What is the job evaluation and compensation plan? How to ensure the final report is comprehensive, clearly structured, and aligned with the company vision?arrow_forwardThe maturity value of an $35,000 non-interest-bearing, simple discount 4%, 120-day note is:arrow_forwardCarl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,905 at 10% for 4 years. Use ordinary interest as needed. Calculate the simple interest note proceeds. Calculate the simple discount note proceeds.arrow_forward
- What you're solving for Solving for maturity value, discount period, bank discount, and proceeds of a note. What's given in the problem Face value: $55300 Rate of interest: 10% Length of note: 95 days Date of note: August 23rd Date note discounted: September 18th Bank discount rate:9 percentarrow_forwardAll tutor giving incorrect solnarrow_forwardSolve this question and don't use aiarrow_forward
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education





