2. A fund is to be created which pays out a scholarship of £9,000 every year in perpetuity. The Assuming an interest rate of 3%, how much should be paid into the fund? £ 数字 Enter an answer correct to 2 decimal places.
Q: A producer of asset S is going to sell it at future time T. Draw naked position revenues as a…
A: A naked contract is a financial agreement in which one party takes a position without any offsetting…
Q: You are given the following data for four portfolios over a recent 10-year period: a) b) c) d)…
A:
Q: Value a risky corporate bond, assuming that the risk-free interest rate is 4 per cent per period,…
A: Binomial tree is a method used to value bonds in a discrete time environment. It involves…
Q: Find the payment necessary to amortize a 4% loan of $900 compounded quarterly, with 14 quarterly…
A: The regular fixed periodic payments made at each periodic interval indicate annuity payments. The…
Q: First National Bank charges 10.5 percent compounded monthly on its business loans. First United Bank…
A: The effective annual rate is the rate of interest after considering the effect of compounding over…
Q: You are the plant accountant for a company that makes a popular brand of basketball shoes.…
A: Certain changes in the advertising costs have been proposed. This will increase the revenue on one…
Q: XYZ Ltd., experts a net income of $150,000. The company has 10% of 500,000 debentures. The equity…
A:
Q: Suppose that we can describe the world using two states and that two assets are available, asset K…
A: To guarantee that you have $100,000 in the future, you can create a portfolio of assets K and L such…
Q: A loan should be repaid over 8 years with 32 quarterly payments of $362.19 at j4 = 8%. Under the…
A: A loan is an agreement between two parties where money is forwarded by one party in exchange for a…
Q: deal on the FX spot market and one
A: Foex trading is selling and purchase of currencies between the client or may be through banks or may…
Q: Assume the total cost of a college education will be $350,000 when your child enters college in 15…
A: Compound interest refers to the method of earning a return where the interest earned in a period…
Q: Mortgage payments Principal: $180,000.00 Interest Monthly Rate Payment 3.5% 5% 6% A. $347,760 C.…
A: STEP 1 The amount that is deducted from your outstanding loan balance is known as the principal…
Q: The Lahiri family rents a room in their home on Airbnb. They deposit all of the money that they earn…
A: FV of an investment refers to the value of the cash flows at a maturity date assuming that they grow…
Q: You have a Bond paying 5.48% semi-annual coupon and maturing on 14-Jul-2029 and currently trading at…
A: a) Consideration for First Leg: The Face Value (FV) of the bond is 10 million, so the consideration…
Q: The previous year's balance sheet for Brown's Produce showed total common equity of $4,050,000 and…
A: Book value per share refers to the value of common equity as per the balance sheet of the company. A…
Q: The coinsurance penalty promotes which of the following? Application of the deductible All of the…
A: Coinsurance penalty Coinsurance is a fine that the insurance company imposes on the policyholder if…
Q: MagnusBane International Plc, a listed company operating in the entertainment sector, has a current…
A: (a) i. Calculation of Straight Debt Value: The straight debt value can be calculated by discounting…
Q: Assume that somebody has to pay £2000 in three years' time and £3000 in seven years' time. They want…
A: A series of two payments have to be replaced by one. The replacement will take place in a manner…
Q: 1. An amount of Php150,000 is invested for 9 months at 4%. What is the interest and the maturity…
A: Hi student Since there are multiple questions, we will answer only first question. Simple interest…
Q: Innovative Designs recently reported $230,000 of sales, $140,500 of operating costs other than…
A: Sales = $230000 Operating Cost other than depreciation= $140500 Depreciation = $ 9200
Q: You are scheduled to receive $10,000 in two years. When you receive it, you will invest it for six…
A: Present value means today's value of the future value of money. It means that the present time…
Q: William Jackson, the CEO of RPL, has requested that the tests of controls only be performed once due…
A: Answer (a) 1. Audit procedure for automatically stop of order for any publisher who have exceeded…
Q: A risk-neutral dealer believes that a stock's fundamental value is equally likely to be 75 or 125.…
A: This is the model of a market with informed and uninformed traders, known as the Kyle model. In this…
Q: (Related to Checkpoint 9.4) (Bond valuation) A bond that matures in 10 years has a $1,000 par value.…
A: Where The price of the bond is "P". The coupon payment is "C". The yield to maturity is "r". The…
Q: Solve for the unknown number of years in each of the following: (Do not round intermediate…
A: Time value of money concept says that a dollar amount invested today will have more value in future…
Q: Hi, I need help with solving the following problem; thank you: A bond has a par value of $1,000, a…
A: The bond price = par value * bond quote Bond Price = $1000×103.12100Bond Price = $1031.2
Q: Flounder, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long…
A: In this question we will be calculating the present value of pension obligation that will be take…
Q: Sarah is thinking about taking out a loan. The interest rate is 6.00 % p.a. and is calculated…
A: Data given: Interest rate=6% p.a. compounded quarterly Term of payment= Monthly Required: Effective…
Q: Suppose you have an account that will grow to $253,000.00 in 25 years. It grows at 7.5% annual…
A: Future value is the value of future cash flow at a certain period after applying a discount rate,…
Q: not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a.…
A: Earning per share shows how much profit is earned by the investor om per share. It shows the…
Q: For an investment ending at time T we denote the net cash flow at time t by ct and the net rate of…
A: The net present value (NPV) of a project can be used to determine whether it is profitable or not.…
Q: Tommy Tutone is buying a $250,000 house and facing $6,500 in closing costs. He plans to put 20% down…
A: Amortization table In a table known as a loan amortization schedule, each periodic loan payment that…
Q: III. A globally diversified portfolio faces a lower market risk than a domestically diversified…
A: The statement "A globally diversified portfolio faces a lower market risk than a domestically…
Q: You have $100,000 to invest in a portfolio containing stock X, stock Y, and a risk-free asset. You…
A: Beta refers to the systematic risk of the investment or the entire investment portfolio. The…
Q: Jorge is a sell-side analyst for Wells Fargo and covers the oil and gas industry. Based on his…
A: Jorge criteria for valuation is: 60% Dividend discount Model, 25% PE and 15% P/S Vanessa's criteria:…
Q: You plan to invest $13223 into an investment that you hope will earn a return of 10.28%. You will…
A: Future Value = P * (1+r)^nWhere P = Principal / Present ValueR = Rate of returnN = Number of Period
Q: ( ² ), ^² = ( ² ). 12 3 respectively, does the price of an asset with returns Consider two assets:…
A: The no-arbitrage property states that the price of an asset must be equal to the expected value of…
Q: You are to make monthly deposits of $875 into a retirement account that pays an APR of 9.5 percent…
A: An annuity is a financial product that pays out a fixed stream of payments to an individual,…
Q: You just started college and plan to go to for a trek to Everest Base Camp for a trek after you…
A: The concept of TVM states that the money earns interest which makes money earned earlier worth more…
Q: Required: (a) Calculate the present value of the note (PV).
A: The present value of the note is as follows. =Amount repaid(1+interest rate)=$10000(1+12%)= $ 8,929
Q: Suppose that the interest rate is 4%. What is the value of the discount factor, v? υ Enter a value…
A: An interest rate is given. We have to find the value of the discount factor and the discount rate.…
Q: Consider the following two mutually exclusive projects: Cash flow (A) -RM300,000 20,000 50,000…
A: If the payback period is less than the total estimated time required to recover the cost of the…
Q: The spot rate of the dollar is SF1.2948/$. The month forward contract for the Swiss franc i quoted…
A: The discount or premium on the forward contract depends on the demand and supply of currency in the…
Q: A: How long will it take for money to triple when invested at 7.2% compounded monthly? B: How long…
A: Data given: A: rate=7.2% compounded monthly B: rate=7.2% monthly rate
Q: What is the new payment on a 25-year, monthly payment, adjustable-rate mortgage after five years if…
A: An adjustable rate mortgage (ARM) is a type of home loan in which the interest rate can change…
Q: Why are NPV, BCR, and IRR considered SUPERIOR indicators of Project Feasibility compared to Payback…
A: The process that analyzes and evaluates an investment/project's feasibility and profitability is…
Q: An investment promises the following payments: March 3 $1000; March 18 $2000; March 26 $3000. If the…
A: To determine the value of the investment as on March 28th we need to take the FV of all the payments…
Q: What rate compounded monthly will yield the effective rate 19.75%?
A: Effective annual interest rate (EAR) refers to the real rate of return that we earn on our savings…
Q: Identify the factors that can influence the decision-making process when managing healthcare…
A: Healthcare funding is a broader term in relation to healthcare financing. It takes into account the…
Q: What is the effective rate (annually compounded rate) of interest corresponding to 9% compounded…
A: The effective annual rate (EAR) is the actual rate of interest that an investment earns over a year,…
Step by step
Solved in 2 steps
- How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%Comprehensive The following are three independent situations: 1. K. Herrmann has decided to set up a scholarship fund for students. She is willing to deposit 5,000 in a trust fund at the end of each year for 10 years. She wants the trust fund to then pay annual scholarships at the end of each year for 30 years. 2. Charles Jordy is planning to save for his retirement. He has decided that he can save 3,000 at the end of each year for the next 10 years, 5,000 at the end of each year for Years 11 through 20, and 10,000 at the end of each year for Years 21 through 30. 3. Patricia Karpas has 200,000 in savings on the day she retires. She intends to spend 2,000 per month traveling around the world for the next 2 years, during which time her savings will earn 18%, compounded monthly. For the next 5 years, she intends to spend 6,000 every 6 months, during which time her savings will earn 12%, compounded semiannually. For the rest of her life expectancy of 15 years, she wants an annuity to cover her living costs. During this period, her savings will earn 10% compounded annually. Assume that all payments occur at the end of each period. Required: 1. In Situation 1, how much will the annual scholarships be if the fund can earn 6%? How much at 10%? 2. In Situation 2, (a) How much will Charles have at the end of 30 years if his savings can earn 10%? How much at 6%? (b) If Charles expects to live for 20 years in retirement, how much can he withdraw from his savings at the end of each year if his savings earn 10%? How much at 6%? (c) How much would Charles need to invest today to have the same amount available at the time he retires as calculated in Situation 2(a) at 10%? How much at 6%? 3. In Situation 3, how much will Patricias annuity be?How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
- You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.2: An investment fund is set up to make payments of $1,250 at the end of every month for 15 years. Interest on the fund is 8.50% compounded monthly. (a) How much money must be deposited into the fund today to allow for this series of payments? (b) How much will be paid out of the fund? (c) How much interest will be earned by the fund?You deposit 20,000 today into a fund paying ?(1)=8%. From this fund, you receive 10 payments of R, with the payments made at the end of 2 years, 4 years, 6 years, …, 20 years. What is R?
- a) In order to create an endowment, which pays Rs 500,000 per year, forever, how much money must be set aside today in the rate of interest is 10%? If the first payment of Rs 500,000 will be received after 3 years, what will be present value of such cash payment? b) Which deal is better, 8.4% compounded annually or 8.6% compounded quarterly or 8.7% compounded monthly? c) What is real interest rate if Rs. 500,000 is invest at 10% per annum for 5 years and inflation rate is 7%?What amount of money invested today at an interest of 14.22% compounded quarterly can provide the following scholarships: P30,000 at the end of each year for 6 years; P40,000 for the next 6 years, and P50,000 thereafter? Draw the cashflow diagram.MANUAL SOLVING PLEASEwhat amount of money invested today at 10% interest can provide the following scholarships: 34,000 pesos at the end of each year for 5 years; 44000 pesos for the next 4 years and 59000 pesos thereafter?
- You plan to set up an endowment at your alma mater that will fund $180,000 of scholarships each year indefinitely. If the principal (the amount you donate) can be invested at 6.4 percent, compounded annually, how much do you need to donate to the university today, so that the first scholarships can be awarded beginning one year from now? (Round answer to 2 decimal places, e.g. 52.75.)Assume that Karen Williams desires to accumulate $1,000,000 in 15 years using her money market fund balance of $209,004. At what interest rate must Karen’s investment compound annually? (Round answer to 0 decimal places, e.g. 5%.) Interest rate %A trust notifies you that you are entitled a grant that would give you annual payments of $6,200 per year in perpetuity. The first payment will be made to you three years later (at the end of year 3). The annual interest rate is 10% (APR). What is the present value of the grant? A. 56,363.64 B. 46,581.52 C. 51,239.67 D. 62,000.00