Finances

academic year interest rate of 3.76 percent would pay a 5,032 dollars interest over 10 years,

Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.

iii. How does the average annual growth rate you calculated in (ii) above compare to the average growth rate the U.S. normally expects?

14. Global Enterprises has just signed a $3 million contract. The contract calls for a payment of $.5 million today, $.9 million one year from today, and $1.6 million two years from today. What is this contract really worth if Global Enterprises can earn 12 percent on its money?

c. Smaller payments mean more time in debt. d. Your lower interest loans also get rolled into the deal so you end up with minimal savings.

b. If you inherited $100,000 today and invested all of it in a security that paid an 8% rate of return, how much would you have in 15 years?

a. What is the CD’s value at maturity (future value) if it pays 10 percent annual interest?

24. Mobilee Oil Company accepted a $10,000, 120-day note, dated March 3, at 8.5% to settle a past due accounts receivable. Mobilee Oil discount the note to raise cash on May 10 at a discounted rate of 9%. What proceeds did Mobilee Oil receive?

10. An investment of $1,000 today will grow to $1,100 in one year. What is the continuously compounded rate of return?

FVN = FV5= PV × (1 +I)N = $500 x (1 + 0.08)5 = $500 x (1.08)5 = $734.66

9. You want to purchase a business with the following cash flows. How much would you pay for this business today assuming you needed a 14% return to make this deal?

After the calculations you end up coming out with a rate of 14.87%. The third and final part of question three asks what rate you will need if the interest is compounded semiannually. All you have to do is double the amount of terms and you will come out with a lower number of 7.177%. Since the interest is compounded semiannually that means that you will need to times that number by two and you come out with your final number of 14.35%.

(Compound value solving for I) at what annual rate would the following have to be investe

Implication: with same other factors, the nearer compounding frequency to +¡Þ, the smaller change in interest rate. Big difference occurs when nominal interate rates are compounded annually and quarterly.

helps a person to manage his personal finances and also to describe the three products of