2. Mina deposits P6,000 every month for her business. If the interest rate is 10% compounded quarterly, what lump sum value can she expect after 20 years? P 1,490,296.28 P 1,474,887.17 P 4,556,2|13.02 а. с. b. d. P 4,507941.80
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- suppose that you invest $100 today in a risk-free investment and let the 4 percent annual intrest rate compound. Rounded to the full dollars, what will be the value of your investment 4 years from now?Which of the following investment options willmaximize your future wealth at the end of 18 years?Assume any funds that remain invested will earn anominal rate of 12% compounded monthly.(a) Deposit $8,000 now.(b) Deposit $120 at the end of each month for thefirst 12 years.(c) Deposit $105 at the end of each month for 18years.(d) Deposit a lump sum in the amount of $35,000 atthe end of year 12.Give typing answer with explanation and conclusion 41. A man inherited a regular down payment of P200,000 every end of 3 months for 10 years. However, he may choose to get a single lump sum payment at the end of 4 years. How much is this lump sum if the cost of money is 14% compounded quarterly? a. P 3,702,939.73 b. P 7,405,879.46 c. P 2,188,122.11 d. No correct answer in the choices
- Suppose Ted deposits $10,000 in a savings plan earning 5% compounded annually and Tess deposits $10,000 ina savings plan earning 10% compounded annually. Both leave their money on deposit for 40 years. Because Tess’srate is twice as great as Ted’s rate, is it true that Tess will earn twice as much interest? Explain why or why not.Then show calculations to prove your point of view. What is the future value for each investment? N i PV PMT FV 5 10An investment promises to pay into an account that pays you 6 percent annually, $150 per month for the next twenty-two years. Suppose the first deposit into the account is made one month from today what is the value of the amount which will be in the account at the end of thirty years? Rounded to 2 decimal places. (Answer up to 2 decimal places)What is the discount yield, bond equivalent yield, and effective annual return on a $7 million commercial paper issue that currently sells at 98.75 percent of its face value and is 122 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161))
- Susie Lee won a lottery. She will have a choice of receiving $25,000 at the end of each year for the next 30 years, or a lump sum today. If she can earn an annual return of 10 percent on any investment she makes, what is the least she should be willing to accept today as a lump-sum payment? (Round to the nearest hundred dollars.) Use the NPV as you have equal cash flows of $25,000 for the next 30 years.Consider the following cash flow: A1=−900 A2=−1,100, A3=−1,300 A4=−1,500. (1)Compute the future value at t = 4 based on an interest rate of 2%. Round to the nearest dollar (2)Define an equal payment series of three cash flows over the time period [2, 4]. What would be the value of A? Round to the nearest dollar.You plan to open a retirement account. Your employer will match 50% of your deposits up to a limit on the match of $2,500 per year. You believe the fund will earn 12% over the next 30 years, and you will make 30 deposits of $5,000, plus 50% employer matching, totaling $7,500 per year. a. How much money will be in the account immediately after the last deposit? b. How much total money will you put into the fund?
- Suppose a bank grants a loan to one customer for a term of five years. The customer promises the bank an annual interest payment of 10 percent. The face (par) value of the loan is $1,000 which is also the current market value as the loan’s current YTM is 10 percent. What is the loan’s duration?Rework part (f), assuming that Annie holds the bond for 10 years and sells it when the required return is 7.0%. Compare your finding to that in part (f), and comment on the bond's maturity risk. PV= 1,000 N=10 I/Y= 7% Assume that Annie buys the bond at its current price of $983.80 and holds it until maturity. What will her current yield and yield to maturity (YTM) be, assuming annual interest? After evaluating all of the issues raised above, what recommendation would you give Annie with regard to her proposed investment in the Atilier Industries bonds?You are going to earn ωt = $200,000 when working (age 21 and 60), and thenyou are going to live for the next 20 years with ωt = $0. Find the constant level ofconsumption C during years (21-80) that can be financed by your income (Interestrate is 5%). Find the level of savings St = ωt −C for periods t ≤60 and for t > 60