1. (a) What is the present worth of $10,000 payments made each year at a nominal...

Question

Question

1. (a) What is the present worth of $10,000 payments made each year at a nominal interest rate of 6%, compounded semi-annuall

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

The answer to the question above is attached below:

2 $ 10000 nominal interest rate remi- annual companding i) Period = 50 year at 6.1 (6) do Demiannual will be 100 Prisde my PV

b2 10000 biannually i = 67.0 - period So bannuil will be 25 Peusd - 2 le=flto-06) . 1 = __ _ 95.44.) Du= PI Hth) / 10000 1-2

Add a comment

Answer 2

Similar Homework Help Questions

1. (a) What is the present worth of $10,000 payments made each year at a nominal...

1. (a) What is the present worth of $10,000 payments made each year at a nominal interest rate of 6%, compounded semi-annually (i.e., twice per year)? (10 points) i. For a period of 50 years? (2 points) ii. In perpetuity? (2 points)
(b) What is the present worth of $10,000 payments made biannually (i.e., every two years) at...

(b) What is the present worth of $10,000 payments made biannually (i.e., every two years) at a nominal interest rate of 6%? a) For a period of 50 years? (2 points) b) In perpetuity (2 points)
2) You are given a perpetuity, with annual payments as follows: Payments of 1 at the...

2) You are given a perpetuity, with annual payments as follows: Payments of 1 at the end of the first year and every three years thereafter. Payments of 2 at the end of the second year and every three years thereafter. Payments of 3 at the end of the third year and every three years thereafter. The interest rate is 5% convertible semi-annually. Calculate the present value of this perpetuity. A. 24 B. 29 C. 34 D. 39 E. 47

Page 2 of 6 Problem 2 A certain U.S. Treasury bond that matures in 15 years has a $10,000 face va...

Page 2 of 6 Problem 2 A certain U.S. Treasury bond that matures in 15 years has a $10,000 face value. This means that the bondholder will receive $10,000.00 cash when the bond's maturity date is reached. The bond pays an annual nominal interest of 8% of its face value in semi-annual installments starting at the end of the 1st semi-annual period. a) Draw a cash flow diagram showing bond payments. b) What is its present worth. PW, ifthe prevailing...
Jean receives annuity payments at the end of every six months. If she deposits these payments...

Jean receives annuity payments at the end of every six months. If she deposits these payments in an account earning interest at 9% compounded monthly, what is the equivalent semi-annually compounded rate of interest? What sum of money must be deposited at the end of every 3 months into an account paying 6% compounded monthly to accumulate to $25,000 in 10 years? Irina deposited $150 in a savings account at the end of each month for 60 months. If the...
What is an annuity? Select one: a. present worth of a series of equal payments. b....

What is an annuity? Select one: a. present worth of a series of equal payments. b. a single payment. c. a series of payments that changes by a constant amount from one period to the next. d. a series of equal payments over a sequence of equal periods. e. a series of payments that changes by the same proportion from one period to the next. Question 2 The present worth factor Select one: a. gives the future value equivalent to...

only numbers 2,3, and 6 You are trying to decide a present worth of a contract....

only numbers 2,3, and 6 You are trying to decide a present worth of a contract. You will receive $10,000 when the contract is signed, a $20,000 payment at the end of Year 1, and $30,000 at the end of Year 2. and $40,000 at the end of Year 3, and $50,000 at the end of Year 4 when the project is completed. Your annual costs for this project are $10,000 per year. What is the present worth of the...
1) Investment X for 100,000 is invested at a nominal rate of interest, j, convertible semi-annually....

1) Investment X for 100,000 is invested at a nominal rate of interest, j, convertible semi-annually. After four years, it accumulates to 214,358.88. Investment Y for 100,000 is invested at a nominal rate of discount, k, convertible quarterly. After two years, it accumulates to 232,305.73. Investment Z for 100,000 is invested at an annual effective rate of interest equal to j in year one and an annual effective rate of discount equal to k in year two. Calculate the value...
1.What is the present value of the deferred annuity if the regular payment is P25,000.00 every...

1.What is the present value of the deferred annuity if the regular payment is P25,000.00 every 6 months, the interest rate is 0.25% compounded semi-annually, with an actual payments of 18, and the period of deferral is 12? 2.What is the present value of the deferred annuity if the regular payment is P5,000.00 every month, the interest rate is 5% compounded monthly, with an actual payments of 60, and the period of deferral is 20? Naa pay lain 3.What is...

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...

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. (a) What is the present worth of $10,000 payments made each year at a nominal...

Homework Answers