Problem 1: Determine the future worth of ten (10) payments starting with an initial $500 payment...

Question

Question

Problem 1: Determine the future worth of ten (10) payments starting with an initial $500 payment and increasing by a constant

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Cash Flow Diagram

Cash Flow 3,000.00 2,500.00 2,000.00 1,500.00 Cash Flow 1,000.00 500.00 0.00 + 0 1 2 3 4 5 6 7 8 9 10

Formula: Future worth of payment = 500 * (F/A,3%,10) + 250 * (F/G,3%,10)

= 500 * 11.463879 + 250 * 48.795977

= 17930.93

Add a comment

Answer 2

Similar Homework Help Questions

Problem 1: Determine the future worth of ten (10) payments starting with an initial $500 payment...

Problem 1: Determine the future worth of ten (10) payments starting with an initial $500 payment and increasing by a constant amount of $250 each year thereafter in an account that yields a nominal annual interest rate of 3.0%. Draw the Cash Flow Diagram: Write the Economic Formula: Solution:
1.What constant payment for the next 10 years (starting 1 year from now, 10 payments) would...

1.What constant payment for the next 10 years (starting 1 year from now, 10 payments) would be equivalent to receiving $350 every other year starting 10 years from now. Assume the annual cost of capital is 13%. 2.Suppose you own two assets with the following payouts. (1) $250 at the end of every year starting 1 year from now. The annual cost of capital for these cash flows is 9%. (2) $650 one year from now and a cash flow...
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...

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...
Problem 1: What will a deposit of $500 at 7% annual interest be worth if left...

Problem 1: What will a deposit of $500 at 7% annual interest be worth if left in the bank for ten years? Problem 2: How much must you deposit at the end of each year in an account that pays an annual interest rate of 20 percent, if at the end of 5 years you want S10,000 in the account? Problem 3: If you invest $2,500 in a bank account that pays 6% interest compounded monthly, how much will you...
Question 1 If you know the future value or worth of something and would like to...

Question 1 If you know the future value or worth of something and would like to know what its present value or worth is, which interest factor could you use? Present worth factor for a uniform series Capital recovery factor Present worth factor for a single payment Compound amount factor Question 2 If you are given a series of payments into the future and want to know their present value or worth, what is the best interest factor to use?...

1. Effects of different compounding periods on future values of $1,000 invested at an 8% nominal...

1. Effects of different compounding periods on future values of $1,000 invested at an 8% nominal interest rate. Initial Amount Compounding periods Effective annual rate FV at end of 1 year $1,000 Annually $1,000 Semiannually $1,000 Quarterly $1,000 Monthly $1,000 Daily (365 days) 2. To illustrate with the simplest case of annual payments, suppose you borrow $22,000 at 12 percent compound annual interest to be repaid over the next six years. Equal installment payments are required at the end of...
10) What future worth is equivalent to the following cash flow profile if i = 10%?...

10) What future worth is equivalent to the following cash flow profile if i = 10%? $500 $400 $300 $200 $100 0 1 2 3 4 5 6 a. $1,520.12 b. $1,947.45 c) S1,320.32 d) $2,120.2 11) A person borrowed a SR 10,000 at TVOM of 10%. He is required to repay the debt with 5 annual payments of SR 2,638. At EOY 3, he borrowed another SR 2,000 that he will repay with two payments of SR 1,152. Select...
In September 2017, Russell Westbrook signed the richest contract in NBA history, a so-called “super-max” deal...

In September 2017, Russell Westbrook signed the richest contract in NBA history, a so-called “super-max” deal starting from the 2018-19 season and running for five years that would entitle him to a salary equal to 35% of the projected salary cap of $100 million that year, with 8% annual raises thereafter. For the sake of simplicity, assume that he receives the entirety of his annual salary as a lump sum at the beginning of each season, and that these payments...

1. The unit cost of installing a solar power system per km² was $5,000 in 2010...

1. The unit cost of installing a solar power system per km² was $5,000 in 2010 when the construction cost index was 1,850. Construction of a 5 MW power system requires 50 km² of land. Estimate the cost of constructing a solar power system of 20 MW in 2020 given that the construction cost index is 2,450 and the size-factor is 0.75? 2. A company that manufactures general-purpose transducers invested $2 million four years ago in high-yield junk box bonds....

Problem 1: Determine the future worth of ten (10) payments starting with an initial $500 payment...

Homework Answers