1. Caden visits a bank and wanted to borrow some money to start for a printing press business. He has given two options: P50,000 at a simple interest rate of 10% for 3 years or P30,000 at a 5% simple interest rate good for 10 years. If he's going to ask you now, what options are you going to choose and recommend to him and why?
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- Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?Solve the following and show your solution. 1. Peter borrowed P100,000 at 8% compounded annually? How much will he be paying after 2 years? 2. A time deposit account in a bank yields 5.5% compound interest annually. Jennifer invested P450,000 for 4 years in this savings account. How much interest will she gain? 3. In order to have P250,000 in 5 years, how much should you invest if the compound interest is 12%? 4. how much should you deposit in a bank paying 2% compounded quarterly toaccumulate an amount of P80,000 in 5 years and 9 months? 5. IF you deposit P5,500 in a bank at an annual simple interest rate of 0.5%,how much money will you have after 12 years?
- Chris wants to have an income of $8200 per year from investments. To that end he is goingto invest $90,000 in three different accounts. These accounts pay 6%, 10%, and 12% simpleinterest. If he wants to invest the same amount in the account paying 6% simple interest ashe has in the account paying 12% simple interest, how much should go into each account?Consider the following situation, which requires comparison of options.Cousin Thaddeus offers to pay you $3,000 every year for the next 10 years if you give him$20,000 now. Let us suppose that your MARR is 10%, and that a local bank is offering this rate.How can you determine whether Cousin Thaddeus’ offer is better than putting the money in the bank?Don Hildebrand is trying to decide whether to invest money in a bank or in something a little riskier that will pay a higher return. One very simple investment promises to pay a minimum of 8% compounded annually, but he must leave all of the money and interest invested for 9 years. How much interest will Don earn during the 9 years if he invests $7,150 and the investment pays the minimum?
- Hashim wants to invest an amount of OMR. 9800 every year to buy a house at the end of 10 years. For this purpose, he wants to invest some money in a saving bank but does not know the exact amount of money he will get after 10 years a) What amount will he receive assuming an interest rate of 4.005%? b) What amount will he receive assuming an interest rate of 5.50%? c) Suggest the option which will be enough to meet his house which is estimated to be OMR. 100000?Scott wants to invest RM1,000 for 1 year. At Bank A, his investment will collect 3% interest compounded daily while at Bank B, his investment will collect 3.50% interest compounded monthly. Which bank offers a better return? How much more will he receive by choosing that bank over the other?Suppose you are offered an investment that will allow you to double your money in 8 years. You have R10 000 to invest. What is the implied rate of interest?Suppose you have a 1-year old daughter and you want to provide R81 000 in 19 years towards her college education. You currently have R2 000 to invest. What interest rate must you earn to have the R81 000 when you need it?Suppose you want to buy a new house. You currently have R15 000 and you figure you need to have a 10% down payment plus an additional 5% of the loan amount in closing costs. If the type of house you want costs about R150 000 and you can earn 8.1% per year, how long will it be before you have enough money for the down payment and closing costs?
- Suppose you decide to wait 5 years to save up before buying the house. You are able to put a down payment of $30,000 on the house, so that you only need to borrow $170,000 from the bank. Assume the interest rate is still the same, but you are now in a better financial position, and you can pay off the loan in 240 equal monthly payments. Answer the following questions about this loan. After making 240 monthly payments, how much of what you paid the bank was interest? $ . ROUND TO THE NEAREST CENT. THANKS APPRECIATE THE HELP!!!You have just graduated and need money to buy a new car. Your rich Uncle Chan willlend you the money so long as you agree to him back within four years, and you offer topay him the rate of interest that he would otherwise get by putting his money in asavings account. Based on your earnings and living expenses, you think you will be ableto pay him RM5,000 in one year, and then RM8,000 each year for the next three years.If Uncle Chan would otherwise earn 6% per year on his savings, how much can youborrow from him?You are in desperate need of cash and turn to your uncle, who has offered to lend you some money. You decide to borrow $1,240 and agree to pay back $1,853 in 2years. Alternatively, you could borrow from your bank that is charging 6.5 percent interest annually. Should you go with your uncle or the bank?