1. (2pts) An investor is required to make a contribution of $1,600 immediately and $10,000 at...
1. (2pts) An investor is required to make a contribution of $1,600 immediately and $10,000 at the end of two years in exchange for receiving $10,000 at the end of one year. Find the internal rate of return.
2. (4pts) Angela loans Betty $8,000. Betty repays the loan by paying $6,000 at the end of one and a half years and $4,000 at the end of three years. The money received by Angela at ? = 1.5 is immediately reinvested at an annual effective interest rate of 6%. Find Angela’s annual yield rate and Betty’s annual effective rate.
Homework Answers
Add Answer to:
1. (2pts) An investor is required to make a contribution of
$1,600 immediately and $10,000 at...
Problem 3. A loan of $10,000 is being repaid with payments of $1,000 at the end...
Problem 3. A loan of $10,000 is being repaid with payments of $1,000 at the end of each year for 20 years. If each payment is immediately reinvested at 5% effective, find the effective annual rate of interest earned by the lender over the 20-year period.
Jen wants to accumulate 400,000 at the end of 16 years. She deposits CX+10,000) into an...
Jen wants to accumulate 400,000 at the end of 16 years. She deposits CX+10,000) into an investment account at the end of each of the first 8 years. She then deposits X into the same account at the end of each of the final 8 years. The interest rate on the account is a 6% nominal rate compounded annually. Find X 7. 8. Keri was offered a choice of two payment options to settle her claims in a car accident...
Need help, please show work for solutions. 1.) An investor just invested $10,000 in an investment that is expected to ea...
Need help, please show work for solutions. 1.) An investor just invested $10,000 in an investment that is expected to earn a 6% interest rate. Assuming the 6% annual return is realized, what will be the value of the investment at the end of 25 years? 2.) If you deposit $45,000 into a 5-year CD today earning 4% interest compounded quarterly, what would be the account balance be at the end of 5 years? 3.) A 22-year old college student...
1) Find i if the following two methods of paying off $10,000 at the end of...
1) Find i if the following two methods of paying off $10,000 at the end of each of 20 years if the total interest paid in each case is the same. a) Annual level payments with an effective annual rate of i% b) Payments every six months at a nominal annual rate of interest of 6% compounded every six months.
1) How long will it take for $12,000 to become $24,000, if it is in an...
1) How long will it take for $12,000 to become $24,000, if it is in an account paying 3% every six months? 2) A department store charges its customers 1.75% per month for their credit purchases. What nominal interest rate are customers charged? What is the effective rate? 3) You deposit $2,000 in a bank that pays 3% compounded continuously. How much are you going to have at the end of 4 years? 4) A car can be purchased with...
4) interest questions: (10 pts total) How much will be in your bank account at the...
4) interest questions: (10 pts total) How much will be in your bank account at the end of five years if you invest $5,000 now at 12% per annum, compounded annually? (1 pts) And what if the interest rate is 12% per annum, but compounded monthly? (1 pts) If you invest your $5,000 and want to have $10,000 in five years' time, what is the minimum yearly interest rate that will ensure that you have at least this much when...
Assignment (Time Value of Money) 1. What is the selling price today of a bond with...
Assignment (Time Value of Money) 1. What is the selling price today of a bond with a face value of $100,000,4% coupon paid annually and maturity of 10 years if market interest rates are: b. 6% c. 2% 2. In exchange for a $20,000 payment today, a well-known company will allow you to choose one of the alternatives shown in the following table, your opportunity cost is 11% Alternative Single Amount $28,000 at the end of 3 years $54,000 at...
3) Two new rides are being compared by a local amusement park in terms of their...
3) Two new rides are being compared by a local amusement park in terms of their annual operating costs. The two rides are assumed to be able to generate the same level of revenue (and thus the focus is on costs) The Tummy Tugger ('Tug") has fixed costs of $ 10,000 per year and variable costs of $2.50 per visitor. The Head Buzzer ("Buzz") has fixed costs of $4,000 per year and variable costs of $4 per visitor. Provide answers...
please answer all of the following questions 1. Which following statement is true, assuming an interest rate of gre...
please answer all of the following questions
1. Which following statement is true, assuming an interest rate of greater than 0%: a. The present value of a dollar to be received one year from today is ALWAYS worth less than one dollar. b. The present value of a dollar to be received one year from today is ALWAYS worth more than one dollar. c. The present value of a dollar to be received one year from today is ALWAYS equal...
Problem 3. A loan of $10,000 is being repaid with payments of $1,000 at the end of each year for 20 years. If each payment is immediately reinvested at 5% effective, find the effective annual rate of interest earned by the lender over the 20-year period.
Jen wants to accumulate 400,000 at the end of 16 years. She deposits CX+10,000) into an investment account at the end of each of the first 8 years. She then deposits X into the same account at the end of each of the final 8 years. The interest rate on the account is a 6% nominal rate compounded annually. Find X 7. 8. Keri was offered a choice of two payment options to settle her claims in a car accident...
1) Find i if the following two methods of paying off $10,000 at the end of each of 20 years if the total interest paid in each case is the same. a) Annual level payments with an effective annual rate of i% b) Payments every six months at a nominal annual rate of interest of 6% compounded every six months.
1) How long will it take for $12,000 to become $24,000, if it is in an account paying 3% every six months? 2) A department store charges its customers 1.75% per month for their credit purchases. What nominal interest rate are customers charged? What is the effective rate? 3) You deposit $2,000 in a bank that pays 3% compounded continuously. How much are you going to have at the end of 4 years? 4) A car can be purchased with...
4) interest questions: (10 pts total) How much will be in your bank account at the end of five years if you invest $5,000 now at 12% per annum, compounded annually? (1 pts) And what if the interest rate is 12% per annum, but compounded monthly? (1 pts) If you invest your $5,000 and want to have $10,000 in five years' time, what is the minimum yearly interest rate that will ensure that you have at least this much when...
Assignment (Time Value of Money) 1. What is the selling price today of a bond with a face value of $100,000,4% coupon paid annually and maturity of 10 years if market interest rates are: b. 6% c. 2% 2. In exchange for a $20,000 payment today, a well-known company will allow you to choose one of the alternatives shown in the following table, your opportunity cost is 11% Alternative Single Amount $28,000 at the end of 3 years $54,000 at...
3) Two new rides are being compared by a local amusement park in terms of their annual operating costs. The two rides are assumed to be able to generate the same level of revenue (and thus the focus is on costs) The Tummy Tugger ('Tug") has fixed costs of $ 10,000 per year and variable costs of $2.50 per visitor. The Head Buzzer ("Buzz") has fixed costs of $4,000 per year and variable costs of $4 per visitor. Provide answers...
please answer all of the following questions
1. Which following statement is true, assuming an interest rate of greater than 0%: a. The present value of a dollar to be received one year from today is ALWAYS worth less than one dollar. b. The present value of a dollar to be received one year from today is ALWAYS worth more than one dollar. c. The present value of a dollar to be received one year from today is ALWAYS equal...
Most questions answered within 3 hours.
-
Thermal Storage Solar heating of a house is much more efficient
if there is a way...
asked 3 minutes ago -
Considering the “fits” for group and job design dimensions,
suppose you had 12 employees with different...
asked 11 minutes ago -
Consider TCP connection management.
How many segments are typically involved in the TCP connection
establishment? What...
asked 21 minutes ago -
1. You placed a stop-loss order to sell 500 shares of AAPL with
a stop price...
asked 28 minutes ago -
Sylva Warehousing desired to locate a central warehouse to serve
five North Carolina markets. Placed on...
asked 30 minutes ago -
A regression was run to determine if there is a relationship
between hours of TV watched...
asked 38 minutes ago -
The theoretical yield of a reaction is the amount of product
obtained if the limiting reactant...
asked 45 minutes ago -
You are an intern at a leading investment bank. Your manager
assigned you a project to...
asked 43 minutes ago -
Please explain how to determine polarity for me.
Rank the following covalent bonds by decreasing
polarity....
asked 45 minutes ago -
1. Express the confidence interval 86.5%±4.6% in interval
form
2. Assume that a sample is used...
asked 1 hour ago -
Suppose in the short run a firm’s production function is given
by Q = L1/2*K1/2, and...
asked 1 hour ago -
Calculation of number of protons, neutrons , and electrons
If given the mass # of 74...
asked 1 hour ago