20) What is the end value of investing $9,000 for 7 years at a continuously compounded rate of 11%? 21) You are to receive $75 per year indefinitely. The market rate of interest for these types of payments is 8%. The price you would pay for this stream is?
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- Jullo Company is considering the purchase of a new bubble packaging machine. If the machine will provide $20,000 annual savings for 10 years and can be sold for $50,000 at the end of the period, what is the present value of the machine investment at a 9% interest rate with savings realized at year end?If you invest 5000 dollars today at a compound interest rate of 9 percent, what will be its future value after 30 years? (CVIF9,30 = 13.268)Select one:a. 66,340 dollars. b. 65,000 dollars.c. 18,500 dollars.d. 60,000 dollars.e. 1,350,000 dollars26)You recently purchased a 20-year investment that pays you $100 at t = 1, $500 at t = 2, $750 at t = 3, and some fixed cash flow, X, at the end of each of the remaining 17 years. You purchased the investment for $5,544.87. Alternative investments of equal risk have a required return of 9 percent. What is the annual cash flow received at the end of each of the final 17 years, that is, what is X?
- How much would you be willing to pay today for an investment that would return P1,250 each year for the next 10 years, assuming a discount rate of 12 percent? A. P4,062.75B. P5,062.75C. P6,062.75D. P7,062.75E. None of the above10. Determine the present value now of an investment of OMR3,000 made one year from now and an additional OMR3,000 made two years from now if the annual discount rate is 4 percent.29. What will P247,000 grow to be in 9 years if it is invested today in an account with an annual interest rate of 11%?
- 4. You are planning to invest OMR 2,500 today for three years at a nominal interest rate of 9 percent with annual compounding. a) What would be the future value of your investment? b) Now assume that inflation is expected to be 3 percent per year over the same three-year period.What would be the investment’s future value in terms of purchasing power? c) What would be the investment’s future value in terms of purchasing power if inflation occurs at a 9 percent annual rate?A. Assume that you have $7500 to invest. You plan to invest it for 10 years at a rate of 7% per year, compounded semiannually. What is the future value (FV) of this investment? B. Assume that you need to accumulate $25,000 by the end of 17 years. You can invest today at a rate of 12% per year, compounded quarterly. At that rate, how much must you invest today (PV) to accumu-late the $25,000? C. Assume that you have $5000 to invest today. At the end of 7 years, you need that $5000 to have grown to $10,000. If you invest at semiannual compounding, what annual rate mustYou want to have $1,970,000 at the end of 22 years. You have $6,000 to invest now, and you will receive $70,000 at the end of 10 years. In addition, you plan to invest an equal amount at the end of every year over the next 22 years to reach your goal. If the annual rate of interest is 6.40% , how much do you have to invest annually? a. $41,586 b. $154,648 c. $36,722 d. $39,503 e. $43,254
- 2(d) Consider an investment that pays Rs. 6,880 in interest every year plus 86,000 when it matures in 12 years. You can buy the investment today for Rs. 64,758. What is the IRR of this investment?7How much more is a perpetuity paying $5000 at the end of year worth than an annuity paying the same annual amounts at the end of each year for 30 years? Assume an interest rate of 5%. a. $10,635.08 b. $21,976.29 c. $50,000.00 d. $23,137.74 8Miller's Hardware plans on saving $40,000, $50,000, and $58,000 at the end of each year for the next three years, respectively. How much will the firm have saved at the end of the three years if it can earn 6% by reinvesting its saving? a. $155,944.00 b. $169,004.13 c. $148,000.00 d. $148,078.15 9On the day you retire you have $500,000 saved. You expect to live another 30 years during which time you expect to earn 8% on your savings while inflation averages 3.5% annually. Assume you want to spend the same amount each year in real terms and die on the day you spend your last dime. What real amount will you be able to spend each year? a. $61,931.78 b. $79,211.09 c. $79,644.58 d. $30,695.7711. You buy a new piece of equipment for $11,778, and you receive a cash inflow of $2,000 per year for 10 years. What is the internal rate of return?
