3. How much must be invested today at 0% to have $26.30 in four years? A. $7.75. B. $10.00. C.$26.30.

Q: 1. Solve each problem involving a single payment investment that earns compound interest. a) $8 000…

A: Time Value :— According to this concept, there is difference in value of money invested today and…

Q: 2. An investment of P3,000,000.00 earns interest of 9% compounded continuously. What is the…

A: Solution:- Effective rate of interest means the net annual interest rate after effect of all the…

Q: 3. If money is invested at 13% compounded quarterly, find the present value of P11,200 due at the…

A: Present Value :— It Means value of Money Or Cash Flow in today. It uses Time Value of Money Fir it's…

Q: If the nominal interest rate is 3%, how much is $5000 worth in 10 years in a continuously compounded…

A: The account value in 10 years is computed using the Future Value formula with continuous…

Q: How much money would you need to invest today at 6% interest compounded quarterly to have 5,387.43…

A: The present value of the cash flow is the present worth of a cash flow at a certain rate of interest…

Q: Q9) The sum of $500, 000 has been placed in an investment which earns interest at the rate of 12…

A: The interest is credited 4 times a year when the interest is compounded quarterly. The interest is…

Q: 9-1 If you invest $500 today in an account that pays 6 percent interest compounded annually, how…

A: 1 PRESENT VALUE 500   INTEREST RATE 6%   YEARS 2   PMT 0 2 FUTURE VALUE 1000…

Q: 22. Your client deposits $5 million in a savings account that pays 5 percent per year compounded…

A: The given problem can be solved using FV function in excel. FV function computes amount balance in…

Q: 34. A sum of P1,000.00 is invested now and left for 8 years, at which time the principal is…

A: Future value can be referred to as the value of an underlying asset or security at a future date.…

Q: 1. It is the amount paid or earned for the use of money. A. Principal 2. What is the equivalent…

A: 1) Borrowed amount is the principal with some predefined interest rate for some duration.

Q: What is the future value of $2,000 invested at the beginning of each year for six years at 4%? a.…

A: The future worth of the investment is the amount which will be receiving in the following years that…

Q: 4. A person invests $500 in a CD that yields 4% compounded semi- annually. a) What is the total…

A: Solution a: Semiannual interest rate = 4%/2= 2% Nos of semiannual periods = 5*2 =10 Accumulated…

Q: The present worth of P 40,000 in the first year and amounts of decreasing by P 3000 per year through…

A: First year amount = P 40,000 Annual decrease = P 3000 Interest rate = 14% Period = 5 Years

Q: 3. Calculate the amount of interest earned on $10,250 invested for 5 years at 8% compounded…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 14.If a principal of $700 amounts to $1100 after six years of investment, then what annual interest…

A: Uisng the rate function

Q: Suppose that $1,000 is invested at 7% interest compounded monthly. Use the formula nt A = P(1 + (a)…

A: A = P * (1+r/n)^nt

Q: 6. An investment of P3,000,000.00 earns interest of 9% compounded continuously. the effective rate…

A: Effective interest ratee is the interest considering the impact of the compounding on the interest…

Q: Determine the amount to be invested at 8%, compounded annually, in order to have $10,000 in 4 years?

A: Present value is the worth of the amount which is expected to received tomorrow or on some future…

Q: 7. Suppose a college student earns $60,000 per year after graduating and works for 50 years. The…

A: The amount which is deposited or paid at the beginning of each period is called as annuity due. The…

Q: 1.You have $2,500 to invest today at 9% interest compounded on an annual basis. a. Find how much you…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Q1) If a saving account awards interest of 6 percent per year compounded quarterly What amount must…

A: Saving account charges compound interest on its deposits. Compound interest is referred as the…

Q: hat the Duration of Assets (DA) is 5 years and the duration of liabilities (DL) is 3 years. The…

A: Duration of security tells us that how much will be change in value of security with change in…

Q: What amount must be invested now in savings account earnings 9% compounded quarterly to accumulate a…

A: Present Value is the current value of the future sum of money at the specific rate of return.

Q: If P100 is placed in an account that requires a rate of return of 4%, compounded quarterly, what…

A: Investment = 100 Quarterly Compounding Required Return = 4%/4 =1% per quarter Time Period = 5…

Q: Use the compound interest formula A=P (1+(r)/(n))^(nt) to compute the total amount after $2000 is…

A: An interest method in which current interest is computed by multiplying the interest rate by the sum…

Q: 6. If money can be invested at 6% compounded annually, A. Accumulate P8,000 for 12 years. B.…

A: Compounding is a way to find the FV of present amount by considering appropriate rate or CVF. It…

Q: 5) earned over a 10-year period if the interest had compounded annually? You invested $6,500 at 6…

A: We will earn more in compound interest due to compounding of interest. The difference between…

Q: 22. A business loan worth P150,000 is to repay in quarterly installment for 2 years. How much is the…

A: Present value is the sum of money that must be invested to achieve a specific future goal. Future…

Q: 10. . You start to save for a major purchase. You can invest GH¢320 every three months for 3 years…

A: Compounding effect on the investment refers to the net amount of interest that is being charged on…

Q: Q9. If an amount of $14,000 is deposited into a savings account at an annual interest rate of 5%,…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: 14. If a principal of $700 amounts to $1100 after six years of investment, then what annual interest…

A: Using excel RATE function

Q: y.  In the second account, interest is compounded continuously.  How much more is in the second…

A:

Q: 2. Suppose $100 is invested at 4% interest compounded annually. The number of years required for the…

A: Future value formula: future value = present value ×1+rtwhere,n=rate of interestt=number of years

Q: If you deposit $45,000 into an account earning 4% interest compounded quarterly per year: 1- How…

A: Future value = Present value * (1+r)^n Where, r = rate of interest per period  i.e. 4%/4 = 1% n =…

Q: What will $142,000 grow to be in 6 years if it is invested today in an account with a quoted annual…

A: Present value (PV) = $142000 Interest rate = 14% Monthly interest rate (r) = 14%/12 =…

Q: 4. (a) Write down the important properties of exponential function. Also, write the domain and range…

A: An exponential function is a mathematical releationship between two variables that can be shown as y…

Q: What is the present value of $5000 to be received in 4 years, if the interest rate is 8% p.a.,…

A: Time value of money (TVM) means that the amount of money received in the present period will have…

Q: Gerson Joseph has ₱ 300,000.00 to invest at 1.12% compounded quarterly. How much is the additional…

A: Investment (P) = P 300,000 Interest rate = 1.12% Quarterly interest rate (r) = 1.12%/4 = 0.28%…

Q: What is the total interest / dividend amount to be repaid at the end of 6 years for the loan of 160…

A: Given: Loan value = 160 000 period = 6 years Interest rate = 15% simple interest

Q: 1. How much should you deposit into an account that pays 3.6% compounded monthly if you want to have…

A: Future Value (FV)=$15,000 Duration (n)=10*12=120 periods Rate of interest (i)= 3.6%12=0.003   As per…

Q: You have been told that you need $25,600 today in order to have $100,000 when you retire 35 years…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: 5. What principal (present value) invested for 3 years at 10% compoun total future value of P4,000?…

A: The present value is the equivalent value today of the future cash flow considering the interest and…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.