1. An amortization of a debt is in a form of a gradient series of P10,000 on the first year, P9,500 on the second year, P9,000 on the third year, P8,500 on the fourth year. Determine the future amount of the amortization if interest is 0.11. 2. An amortization of a debt is in a form of a gradient series of P10,000 on the first year, P9,500 on the second year, P9,000 on the third year, P8,500 on the fourth year. Determine the equivalent present worth of the debt if interest is 0.19.

1. An amortization of a debt is in a form of a gradient series of P10,000 on the first year, P9,500 on the second year, P9,000 on the third year, P8,500 on the fourth year. Determine the future amount of the amortization if interest is 0.11. 2. An amortization of a debt is in a form of a gradient series of P10,000 on the first year, P9,500 on the second year, P9,000 on the third year, P8,500 on the fourth year. Determine the equivalent present worth of the debt if interest is 0.19.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section: Chapter Questions

Problem 1WNG

See similar textbooks

Similar questions

1. What is the exact simple interest on $2,800 for the period from February 12 to july 6 of 1996, if the rate of interest is 4%? 2. You owe $120,000 from your ex-girlfriend and promise to pay 6% simple interest. How much will you pay at the end of 1 year and 6 months? 3.You owe $120,000 from your ex-girlfriend and promise to pay 6% simple interest. How much will you pay at the end of 9 months?
Today, you invest ₱100,000 into a fund that pays 25% interest compounded annually. Three years later, you borrow ₱50,000 from a bank at 20% annual interest and invest in the fund. Two years later, you withdraw enough money from the fund to repay the bank loan and all interest due on it. Three years from this withdrawal you start taking ₱20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was withdrawn? Note: Draw the cashflow diagram
Today, you invest ₱100,000 into a fund that pays 25% interest compounded annually. Three years later, you borrow ₱50,000 from a bank at 20% annual interest and invest in the fund. Two years later, you withdraw enough money from the fund to repay the bank loan and all interest due on it. Three years from this withdrawal you start taking ₱20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was withdrawn? Note: Draw the cashflow diagram and solve using the formula of annuities
An amortization of a debt is in a form of a gradient series of P10,000 on the first year, P9,500 on the second year, P9,000 on the third year, P8,500 on the fourth year. Determine the future amount of the amortization if interest is 0.11. Use one of the following formulas. Show complete solution.
What uniform annual payment for 30 years is equivalent to spending $10,000 immediately, $10,000 at the end of 10 years, $10,000 at the end of 20 years, and $2,000 a year for 30 years? Assume an interest rate of 8%.
1. Jean deposited P2,000, P2,500 and P3,000 at the end of the 2nd year, 3rd year and 4th year, respectively in a savings account which earned 0.06 per annum. Determine the future worth of the deposit? 2. Jean deposited P2,000, P2,500 and P3,000 at the end of the 2nd year, 3rd year and 4th year, respectively in a savings account which earned 0.19 per annum. What is the equivalent uniform deposit for the uniform gradient only?
Solve the following, using interest at 7% compounded annually: a) What is the amount that will be accumulated in a sinking fund at the end of 15 years if $200 is deposited in the fund at the beginning of each of the 15 years if $200 is deposited in the fund at the beginning of each of the 15 years? b) Uniform deposits are to be made on January 1 of 1991, 1992, 1993, and 1994 into a fund that is intended to provide $1,000 on January 1 of 2005, 2006, and 2007. What must be the size of these deposits?
Solve the following, using interest rate at 7% compounded annually: a) What is the amount that will be accumulated in a sinking fund at the end of the 15th year if $200 is deposited in the fund at the beginning of each of the 15 years? b) What uniform annual payment for 30 years is equivalent to spending $10,000 immediately, $11,000 at the end of 10 years, $12,000 at the end of 20 years, and $2,000 a year for 30 years?
Suppose that an oil well is expected to produce 100,000 barrels of oil during its first year of production. However, its subsequent production (yield) is expected to decrease by 10% over the previous years' production. the oil well has a proven reserves of 1,000,000 barrels. a) Suppose that the price of oil is expected to be $60 per barrel for the next several years. What would be the present worth of the anticipated revenue stream at an interest rate of 12% compounded annually over the next seven years? b) Suppose that the price of oil is expected to start at $60 per barrel during the first year, but to increase at the rate of 5% over the previous year's price. What would be the present worth of the anticipated revenue stream at an interest rate of 12% compounded annually over the next seven years? c) Consider part (b) again. After three year's production, you decide to sell the oil well. what would be a fair price? Note:- Do not provide handwritten solution. Maintain accuracy and…
An entrepreneur needs thousand of dollars to launch the global expansion of his software business. I have agreed to lend him the money today (n=0) at an interest rate of 8% compounded quarterly. I required that the loan be repaid in eight annual payments starting at Year 4 with a $20K payment. Subsequent payments will decrease by $1K each year thereafter. (1) What is the present value of the money being borrowed? (2) Convert your Present Value to Annual Payment. Use one of the following formulas. Show complete solution.
For a principal borrowed under %14 nominal interest rate, compounded annually, a bank offers two alternative payment plans in gradient series with 35 years of payment horizon Base payment of $1000 at the end of the first year, and at the end of every next year, the payment size will be increased by $25 compared to the previous year. Base payment of $800 at the end of the first year, and at the end of every next year, the payment size will be increased by a constant $x compared to the previous year. What is x? Choose the closest value to your answer. For a principal borrowed under %14 nominal interest rate, compounded annually, a bank offers two alternative payment plans in gradient series with 35 years of payment horizon Base payment of $1000 at the end of the first year, and at the end of every next year, the payment size will be increased by $25 compared to the previous year. Base payment of $800 at the end of the first year, and at the end of every next year, the payment size…
Suppose that on September 30, 2021, a person opened an investment account with an initial deposit of $20,000. The account guarantees to pay interest at a nominal annual rate of 6%, compounded monthly. The person plans to deposit $3,000 into the account at the end of each and every month starting on October 31, 2021 and ending on March 31, 2024 (a total of 30 additional deposits). (a) How much money will be in the account after the 30th additional deposit is made? (b) What is the total amount of interest that will be earned over the 30-month planning horizon? (c) What is the effective annual interest rate that will be earned? Express your answer to the nearest tenth of a percent, i.e., in the form xx.x%.