Present Value of $500 today = $500*PVF(10%, 8 years)
= $500*0.467
= $233.5
Hence, value of investment at Time 0 = $233.5
5, $500 is paid at time 8 years at a constant force of interest 10%. Deter-...
a. An initial $500 compounded for 10 years at 8%. b. An initial $500 compounded for 10 years at 16%. c. The present value of $500 due in 10 years at 8%. d. The present value of $2,325 due in 10 years at 16% and at 8%. e. Define present value. (choose one of the following) The present value is the value today of a sum of money to be received in the future and in general is less than...
3.27 For the cash flows shown in the diagram, deter- mine the value of x that will make the Present worth in year 8 equal to $ -50,000 1 - 10per year 0 2 5 6 8 Year 2x 2r 2x
pus) Let ALT) = 3 + 2t + 800. Find the force of interest at time t = 3. find the present value at time 0 of $300 4. (3pts) Given that the force of interest is 8 = to be paid at time t = 4. oto) Inflation in
Problem 9 - Unknown Time & Unknown Interest Rate At a constant force of interest of 5%, a loan is being repaid with 3 payments: a payment of 1000 at the end of 10 years, a payment of 4000 at the end of 20 years, and a payment of 10000 at the end of 30 years. Compute the time T the borrower could repay the loan with a single payment of 11500. T= (Give your answer correct to 2 decimal...
(a) Payments of RM 100 are made continuously throughout the year for 8 years and interest is credited at a constant force of interest, 8, of 5%. Calculate the future value of these payments at the end of 8 years. (b) Now assume a payment of RM 100 is made continuously throughout the first year, a payment of RM 200 is made continuously throughout the second year, and so on until a payment of RM 800 is made continuously throughout...
10. Finding the interest rate and the number of years The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security of $10,000 will be worth $14,693 five years in the future, assuming that no additional deposits or withdrawals are made, what is the Implied interest rate the investor will earn on the security? O 4.80% O 6.00% O 6.40% O...
5. What is the real future value of $500 after 10 years if the nominal interest rate is 13% and inflation is 2%? (5)
Chapter 5 Time Value of Money 179 ermediate blems 5-9 5-10 PRESENT AND FUTURE VALUES FOR DIFFERENT PERIODS Find the following values using the ators and then a financial calculator Compounding/discounting occurs annually. a. An initial $600 compounded for 1 year at 6% b. An initial $600 compounded for 2 years at 6% c. The present value of $600 due in 1 year at a discount rate of 6% d. The present value of $600 due in 2 years at...
No
excel solutions please. Thank you
) Consider a perpetuity, which make payments twice a year. The first-year payments are 5 at time 0.5 years and 5 at time 1, next year they are 10 at time 1.5 years and 10 at time 2, in the third year the payments are 15 at time 2.5 years and 15 at time 3, and so on. The annual interest rate is 8% nominal convertible semiannually. Find the present value of this perpetuity...
1.) An investment in manufacturing equipment yields the following cash flows for 8 years. At the end of the 8th year the equipment can be sold for $15,000. Assuming an interest rate of 14% (compounded annually), how much would you be willing to invest in this manufacturing equipment? C=? I=2000 I=2000 I=2000 I=2000 I=1000 I=1000 I=1000 I=1000 L=$15,000 0 1 2 3 4 5 6 7 8 C: Cost, I: Income, L: Salvage Value 2.) Suppose that the nominal annual...