An investor has asked for your help with the following time value of money applications. Table...
An investor has asked for your help with the following time
value of money applications. Table 6-4. (Use
appropriate factor(s) from the tables provided. Round the PV
factors to 4 decimals.)
Required:
a. What is the present value of $65,000 to be received in
five years using a discount rate of 12%?
b. How much should be invested today at a return
on investment of 12% compounded annually to have $65,000 in five
years?
Homework Answers
a.
Present Value = Future Value/(1 + r)6
Present Value = 65,000/(1.12)5
Present Value = $36,882.7456
b.
Amount Invested today = $36,882.7456
Add Answer to:
An investor has asked for your help with the following time
value of money applications. Table...
Time Value of Money: Basics Using the equations and tables in Appendix 12A of this chapter,...
Time Value of Money: Basics Using the equations and tables in Appendix 12A of this chapter, determine the answers to each of the following independent situations: Round all answers to the nearest whole number. a. The future value in two years of $11,500 invested today in a certificate of deposit with interest compounded annually at 10 percent. b. The present value of $13,000 to be received in five years, discounted at 8 percent c. The present value of an annuity...
Solve for the Present Value of a Lump Sum with the Following Situation: Investor has been...
Solve for the Present Value of a Lump Sum with the Following
Situation: Investor has been offered an investment opportunity that
is expected to provide $1,300 cash inflow at the end of five years.
Investor is able to make 5% compounded annually on other
investments. (This 5% discount rate can be thought of as an
opportunity cost of capitalthe return the investor is forgoing on
an alternative investment of equal risk). How much can the investor
pay today for this...
Using the appropriate present value table and assuming a 12% annual interest rate, determine the present...
Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2021, of a five-period annual annuity of $5,000 under each of the following situations: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. The first payment is received on December 31, 2022, and interest is compounded annually. table or calculator function- payment-...
Using the appropriate present value table and assuming a 12% annual interest rate, determine the present...
Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2021, of a five-period annual annuity of $5,900 under each of the following situations: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) The first payment is received on December 31, 2022, and interest is compounded annually. The first payment is received on...
Marshall has received an inheritance and wants to invest a sum of money today that will...
Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,000 at the end of each of the next 10 years. Assuming he can earn an interest rate of 5% compounded annually, how much of his inheritance must he invest today? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
Calculate the future value of the following single amounts. (FV of $1, PV of $1, FVA...
Calculate the future value of the following single amounts. (FV
of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate
factor(s) from the tables provided. Round your answers to 2 decimal
places.)
Future Value Initial Investment 1. $ 8,000 6,000 | 3. 9,000 Annual Rate 10 % 12 % 8% Interest Period Compounded Invested Annually 7 years Semiannually 4 years Quarterly 3 years
Using the appropriate present value table and assuming a 12% annual interest rate, determine the present...
Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 3 2021, of a five-period annual annuity of $3,800 under each of the following situations (EV. 51. PV 51. EVA 051. PVA O SI EVADA $1 and PVAD of $11) (Use appropriate factor(s) from the tables provided.) Ched my w 1. The first payment is received on December 31, 2022, and interest is compounded annually 2. The first payment is received...
An investment product promises to pay $61,000 at the end of 10 years. If an investor...
An investment product promises to pay $61,000 at the end of 10 years. If an investor feels this investment should produce a rate of return of $11%, compounded annually, what's the most the investor should be willing to pay for the investment?(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Exercise 5-9 (Algo) Present value; annuities [LO5-8) Using the appropriate present value table and assuming a...
Exercise 5-9 (Algo) Present value; annuities [LO5-8) Using the appropriate present value table and assuming a 12% annual Interest rate, determine the present value on December 31, 2021, of a five-period annual annuty of $2900 under each of the following situations: (Ev.of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriete fector(s) from the tables provided.) ed 1. The first payment is received on December 31, 2022 and interest is...
Ch. 6 Time Value of Money Concepts (2 marks) E6-6 Present value; annuities Using the appropriate...
Ch. 6 Time Value of Money Concepts (2 marks) E6-6 Present value; annuities Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2013, of a five-period annual annuity of $5,000 under each of the following situations: 1. The first payment is received on December 31, 2014, and interest is compounded annually. 2. The first payment is received on December 31, 2013, and interest is compoundled annually. 3. The first...
Time Value of Money: Basics Using the equations and tables in Appendix 12A of this chapter, determine the answers to each of the following independent situations: Round all answers to the nearest whole number. a. The future value in two years of $11,500 invested today in a certificate of deposit with interest compounded annually at 10 percent. b. The present value of $13,000 to be received in five years, discounted at 8 percent c. The present value of an annuity...
Solve for the Present Value of a Lump Sum with the Following
Situation: Investor has been offered an investment opportunity that
is expected to provide $1,300 cash inflow at the end of five years.
Investor is able to make 5% compounded annually on other
investments. (This 5% discount rate can be thought of as an
opportunity cost of capitalthe return the investor is forgoing on
an alternative investment of equal risk). How much can the investor
pay today for this...
Calculate the future value of the following single amounts. (FV
of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate
factor(s) from the tables provided. Round your answers to 2 decimal
places.)
Future Value Initial Investment 1. $ 8,000 6,000 | 3. 9,000 Annual Rate 10 % 12 % 8% Interest Period Compounded Invested Annually 7 years Semiannually 4 years Quarterly 3 years
Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 3 2021, of a five-period annual annuity of $3,800 under each of the following situations (EV. 51. PV 51. EVA 051. PVA O SI EVADA $1 and PVAD of $11) (Use appropriate factor(s) from the tables provided.) Ched my w 1. The first payment is received on December 31, 2022, and interest is compounded annually 2. The first payment is received...
Exercise 5-9 (Algo) Present value; annuities [LO5-8) Using the appropriate present value table and assuming a 12% annual Interest rate, determine the present value on December 31, 2021, of a five-period annual annuty of $2900 under each of the following situations: (Ev.of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriete fector(s) from the tables provided.) ed 1. The first payment is received on December 31, 2022 and interest is...
Ch. 6 Time Value of Money Concepts (2 marks) E6-6 Present value; annuities Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2013, of a five-period annual annuity of $5,000 under each of the following situations: 1. The first payment is received on December 31, 2014, and interest is compounded annually. 2. The first payment is received on December 31, 2013, and interest is compoundled annually. 3. The first...
Most questions answered within 3 hours.
-
A 1400Kg sports car accelerates from rest to 90km/h in 7.0s.
What is the average power...
asked 6 minutes ago -
For the following reaction, 0.128 moles of
potassium hydrogen sulfateare mixed with
0.504 moles of potassium...
asked 3 hours ago -
1. What is the present value of $400, three years in the future
if the interest...
asked 4 hours ago -
The labor force minus the number of employed equals the number
of unemployed.
a. True
b....
asked 6 hours ago -
Determine the mass in units of grams​ [g] of 0.49 moles​ [mol]
of a new fictitious...
asked 6 hours ago -
A horizontal mass of M=5kg is on a spring and stretched to
x=0.5m when released from...
asked 7 hours ago -
26 of 50
"I have worked at the Arizona Humane Society for ten years, and
have...
asked 8 hours ago -
Compare and contrast zero based budgeting and incremental (or
base year) budgeting.
asked 8 hours ago -
4 pts 10. Which of the following hypothesis would be MOST
difficult to test experimentally? Group...
asked 8 hours ago -
A business owner makes 1,000 items a day. Each day he or she
contributes eight hours...
asked 8 hours ago -
A
circular loop in the plane of a paper lies inca0.65 T magnetic
field pointing into...
asked 8 hours ago -
A business owner is trying to decide whether to buy, rent, or
lease office space and...
asked 8 hours ago