4. Consider that you are depositing 1000 Riyals, annually, from year 2021 to year 2023 (as shown in the diagram). You decide to take this money out in installments of A riyals (each) from 2023-2025. Calculate the value of A, if the annual interest rate is 10 %. THE BASE YEAR of the scheme is YEAR 2023. ---. V42 =1000 (F/A, 0.1, 3)... ..(1) ...... V4,1= A +A (P/A, 0.1,2)..... (2) If equations are equal; A=1206.5 Riyal
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- 4. Eleanor makes year-end deposits of 500,000 the first year, 550,000 the second year, 605,000 thethird year, and so on increasing the next year’s deposit by 10% of the deposit in the preceding yearuntil the end of the 10th year. Ronald makes equal year-end deposits of 720,00,000 each year for 10years. A.) Is the gradient of Eleanor’s payments increasing or decreasing?B.) If interest on both funds is 12% compounded annually, who will be able to save more atthe end of 10 years.4. Joyce buys a television set from a merchant who asks P 18,750 at the end of 60 days (cash in 60 days). Joyce wishes to pay immediately and the merchant offers to compute the cash price on the assumption that money is worth 8% simple interest. What is the cash price today?Suppose that an oil well is expected to produce 1,200,000 barrels of oil during its firstyear in production. However, its subsequent production (yield) is expected to increaseby 9% over the previous year's production. The oil well has a proven reserve of10,500,000 barrels. (a)Suppose that the price of oil is expected to be $120 per barrel for the next six years.What would be the present worth of the anticipated revenue stream at an interest rateof 10% compounded annually over the next six years?(b)Suppose that the price of oil is expected to start at $120 per barrel during the firstyear, but to increase at the rate of 3% over the previous year's price. What would bethe present worth of the anticipated revenue stream at an interest rate of 10%compounded annually over the next six years?(c)Consider part (b) again. After three years' production, you decide to sell the oil well.What would be a fair price?
- Suppose that on September 30, 2021, a person opened an investment account with an initial deposit of $20,000. The account guarantees to pay interest at a nominal annual rate of 6%, compounded monthly. The person plans to deposit $3,000 into the account at the end of each and every month starting on October 31, 2021 and ending on March 31, 2024 (a total of 30 additional deposits). (a) How much money will be in the account after the 30th additional deposit is made? (b) What is the total amount of interest that will be earned over the 30-month planning horizon? (c) What is the effective annual interest rate that will be earned? Express your answer to the nearest tenth of a percent, i.e., in the form xx.x%.1. What is the Single Payment Compound Amount factor for an interest rate of 2% over 10 years? 2. What is the Uniform Gradient Future Worth factor for an interest rate of 10% over 10 years? 3. What is the Uniform Series Present Worth factor for an interest rate of 5.5% over 20 years? 4. A bank pays 3% interest per year (compounded annually). a. To what amount will a $5,000 deposit grow if left in the bank for 10 years? b. Draw the Cash Flow Diagram for this problem.2. Calculate the value of P corresponding to the following series, if the effective interest rate applicable to each period is 10%:
- 4. At what rate of simple interest will the sum of money double itself in 6 years. 5. Solve for F, given that P—$1999,99, i=1.43% and n=1 and three-fourths years.Pls solve for the ordinary annuity of the following: Joe deposits $22,000 at the end of each year for 7 years, in an account paying 6 % compounded annually, how much will he have on deposit after 7 years? Ans: $184,664.43 Napoleon deposits $1,200 at the end of each quarter for 10 years, in an account paying 8 % compounded quarterly, how much will he have on deposit after 10 years? Ans: $72,482.38 Jose wants to retire in twenty years and for this purpose he is depositing $200 at the end of each month in a sinking fund that pays 7.2% compounded monthly. If he will be doing this for twenty years, then how much money will be there for him when he retires? Ans: $106,752.471. Suppose that $100 is invested for five years at an interest rate of 8% per year, compounded annually. How much will be in the account at the end of five years? 2. Suppose that an investor wishes to deposit an amount now so that in 30 years $1,000,000 will be in an account that pays 10% interest per year, compounded annually. What amount must be deposited now? 3. How many years are required for an investment to double in value at 10% interest? 4. Suppose that an investor wishes to deposit an amount now so that in 20 years there will be $50,000 in an account that pays 7% interest, compounded annually. What amount must be deposited now?
- 2 A man borrowed Php 120,000 and promised to pay annually for 5 years. The payment starts at "X' pesos. The man intends to increase his payments by Php 5,000 at the end of each successive year. If the interest rate is 8% compounded annually, how much will the first payment cases be? If the man decides to pay annually with 8 equal payments with the first payment to be madeafter 4 years, what will be the amount of the annual payment? Construct the cash flow diagram for both cases.Suppose that you purchase a 2 year coupon bond at the time it is issued for $1100. The face value of the bond is $1000, with annual coupon payments of $80. a. What is the bond’s “coupon rate”? b. What is the bond’s “current yield”? c. What is the bond’s (nominal) “yield to maturity”? d. If you hold the bond for 1 year and sell it for $1035 (after collecting the first coupon payment), what is your “holding period rate of return”? Please answer all part otherwise DounvoteSuppose P100, 000 is deposited in an account that earns 8% compound interest that is compounded semi-annually. In how many years will the initial investment triple? a.13.01 years b.14.01 years c.14 years d.13 years As advised by your financial adviser, you started to save P15,000 and deposited it every in the beginning of each month in a bank with 6% interest compounded annually, How much is the total amount after 8 years? (Hint: Future Value of General Annuity Due) a. 4,935,561.09 b. 3,495,561.09 c. 5,493,561.09 d. 9,435,561.09
