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2(b) Three years ago, your company had to select an investment option out of the following...
Four years ago, you opened a mutual fund account and made three deposits ($200 four years ago, SX...
Four years ago, you opened a mutual fund account and made three deposits ($200 four years ago, SX three years ago, and $300 a year ago) where you earned varying interest rates according to the following diagram. Today, your balance shows $1,000. Determine the amount of deposit that was made three years ago (SX). See the following figure (a) $215 (b) $237 (c) $244 (d) $259 F $1,000 6% 8% 12% 15% -1 0 $200 $300
Four years ago, you...
6. A company issued a 25-year bond two years ago at a coupon rate of 5.3...
6. A company issued a 25-year bond two years ago at a coupon rate of 5.3 percent. The bond makes semiannual coupon payments. If the bond currently sells for 105 percent of its par value of $1,000, what is the YTM? 7. Bond X makes semiannual payments. The bond pays a coupon rate of 7 percent, has a YTM of 6.2 percent, and has 13 years to maturity. Bond Y makes semiannual payments. This bond pays a coupon rate of...
engineering economics You investment options. The first option is a bond with a maturity date three...
engineering economics
You investment options. The first option is a bond with a maturity date three years from now that offers 12.25% per year simple interest rate, payable annually. The interest can be withdrawn only at the end of year 3. Another option is a tax-free market savings account that offers 11.5% per year simple interest rate, and the funds can be withdrawn any time after 2 years. are given KDS000 as a graduation gift and you are looking into...
Consider the following alternatives: i. $130 received in one year ii. $230 received in five years...
Consider the following alternatives: i. $130 received in one year ii. $230 received in five years iii. $ 350 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 9 % per year. b. What is your ranking if the interest rate is 3 % per year? c. What is your ranking if the interest rate is 13 % per year? Rank the alternatives from most valuable to least valuable if...
P 3-24 (similar to) Your brother has offered to give you either $20,000 today or $40,000...
P 3-24 (similar to) Your brother has offered to give you either $20,000 today or $40,000 in 10 years. If the interest rate is 7% per year, which option is preferable? The present value of the future amount (amount received n 10 years) is $1 (Round to the nearest dollar.) Your bank pays 2.5% interest per year. You put $1,300 in the bank today and $700 more in the bank in one year. How much will you have in the...
1. A local car wash charges $3.00 per wash or the option of paying $12.95 for...
1. A local car wash charges $3.00 per wash or the option of paying $12.95 for 5 washes, payable in advance with the first wash. If you normally washed your car once a month, would the option be worthwhile if your Minimum Attractive Rate of Return (MARR) is 29% compounded annually? 2. A person borrows $5,000 at an interest rate of 187 compounded monthly. Monthly payments of $180.76 are agreed upon. (a) What is the length of the loan? (Hint:...
4. Suppose you can have option A: $3,000 today, or option B: $10,000 in 10 years....
4. Suppose you can have option A: $3,000 today, or option B: $10,000 in 10 years. Which option do you take? Use 12% for discounting (or 12% for your interest rate). At what interest rate (be specific!) are you indifferent about making the two choices? 5. Imagine you buy a bond, priced at $1,000. This bond pays $50 in interest every year and in the fifth year it pays the $50 in interest plus the return of the $1,000 principle....
39. You bought a painting 10 years ago as an investment. You originally paid for $484,050,...
39. You bought a painting 10 years ago as an investment. You originally paid for $484,050, what was your annual return on investment? A) 47% B) 47% C) 1996 D) 12.8% Answer: $85,000 for it. If you sold it 40. What is the present value of S12.500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $10. A) $5,790 B) $11,574 C) $9,210 D) $17,010 Answer il. You wish...
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is...
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year Option B: Interest is to be received on a yearly basis and the Principal is to be received at the end All loan repayment items are end-of-year payments Which...
uppose 20 years ago your mother deposited $ 2,500 in an account earning 12%. After 10...
uppose 20 years ago your mother deposited $ 2,500 in an account earning 12%. After 10 years she withdrew $1,000. Obtain today s value. $21.009.88 $22,037.26 $23,115.73 $24,115.73 0/10 pts Question 5 Assume an investment of $10,000 over a ten-year period. Which of the following would yield the highest total amount at the end of the ten-year period? 11% simple interest for the entire period. 7.5% interest compounded annually for the first five years and then simple interest for the...
Four years ago, you opened a mutual fund account and made three deposits ($200 four years ago, SX three years ago, and $300 a year ago) where you earned varying interest rates according to the following diagram. Today, your balance shows $1,000. Determine the amount of deposit that was made three years ago (SX). See the following figure (a) $215 (b) $237 (c) $244 (d) $259 F $1,000 6% 8% 12% 15% -1 0 $200 $300
Four years ago, you...
6. A company issued a 25-year bond two years ago at a coupon rate of 5.3 percent. The bond makes semiannual coupon payments. If the bond currently sells for 105 percent of its par value of $1,000, what is the YTM? 7. Bond X makes semiannual payments. The bond pays a coupon rate of 7 percent, has a YTM of 6.2 percent, and has 13 years to maturity. Bond Y makes semiannual payments. This bond pays a coupon rate of...
engineering economics
You investment options. The first option is a bond with a maturity date three years from now that offers 12.25% per year simple interest rate, payable annually. The interest can be withdrawn only at the end of year 3. Another option is a tax-free market savings account that offers 11.5% per year simple interest rate, and the funds can be withdrawn any time after 2 years. are given KDS000 as a graduation gift and you are looking into...
P 3-24 (similar to) Your brother has offered to give you either $20,000 today or $40,000 in 10 years. If the interest rate is 7% per year, which option is preferable? The present value of the future amount (amount received n 10 years) is $1 (Round to the nearest dollar.) Your bank pays 2.5% interest per year. You put $1,300 in the bank today and $700 more in the bank in one year. How much will you have in the...
1. A local car wash charges $3.00 per wash or the option of paying $12.95 for 5 washes, payable in advance with the first wash. If you normally washed your car once a month, would the option be worthwhile if your Minimum Attractive Rate of Return (MARR) is 29% compounded annually? 2. A person borrows $5,000 at an interest rate of 187 compounded monthly. Monthly payments of $180.76 are agreed upon. (a) What is the length of the loan? (Hint:...
4. Suppose you can have option A: $3,000 today, or option B: $10,000 in 10 years. Which option do you take? Use 12% for discounting (or 12% for your interest rate). At what interest rate (be specific!) are you indifferent about making the two choices? 5. Imagine you buy a bond, priced at $1,000. This bond pays $50 in interest every year and in the fifth year it pays the $50 in interest plus the return of the $1,000 principle....
39. You bought a painting 10 years ago as an investment. You originally paid for $484,050, what was your annual return on investment? A) 47% B) 47% C) 1996 D) 12.8% Answer: $85,000 for it. If you sold it 40. What is the present value of S12.500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $10. A) $5,790 B) $11,574 C) $9,210 D) $17,010 Answer il. You wish...
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year Option B: Interest is to be received on a yearly basis and the Principal is to be received at the end All loan repayment items are end-of-year payments Which...
uppose 20 years ago your mother deposited $ 2,500 in an account earning 12%. After 10 years she withdrew $1,000. Obtain today s value. $21.009.88 $22,037.26 $23,115.73 $24,115.73 0/10 pts Question 5 Assume an investment of $10,000 over a ten-year period. Which of the following would yield the highest total amount at the end of the ten-year period? 11% simple interest for the entire period. 7.5% interest compounded annually for the first five years and then simple interest for the...
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