4. If a refrigerator is offered for sale at the amount of P 18,000.00 payable after 1 year. If you wish to pay immediately, what is the present value of the refrigerator if the seller offers to compute the cash price on the assumption that the money is worth 8% in the simple interest?
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4. If a refrigerator is offered for sale at the amount of P 18,000.00 payable after 1 year. If you wish to pay immediately, what is the present value of the refrigerator if the seller offers to compute the cash price on the assumption that the money is worth 8% in the simple interest?
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- Suppose you expect to receive a $10,000 bonus from your employer in two years upon completing your college degree. If the interest rate is 5%, what is the present value of the $10,000? The present value is $9,070.30 $9,523.80 $11,025.00 $10,500.004. 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?10. Suppose the interest rate is 5% and that you are to receive three annual payments of $10,000, with the first payment one year from now, the second payment two years from now, and the third payment three years from now. What is the present value of this stream of payments?
- What uniform annual payment for 30 years is equivalent to spending $10,000 immediately, $10,000 at the end of 10 years, $10,000 at the end of 20 years, and $2,000 a year for 30 years? Assume an interest rate of 8%.Suppose Sally’s current salary is $62,000 per year, and she is planning to retire 25 years from now. She anticipates that her annual salary will increase by $1,800 each year. in the first year she will earn $62, 000 in the second year $63, 800 in the third year $65, 600 and so forth.) At the end of each of the next 25 years, she plans to deposit 10% of her salary from that year into a retirement fund that earns 6% interest compounded daily. How much money will be in her account at the time of her retirement?Suppose you make an annual contribution of $5,000 to your savings account at the end of each year for five years. If your savings account earns 6% interest annually, how much can be withdrawn at the end of five years? (See Figure 2.16.)
- 7. What is the amount of 10 equal annual deposits that can provide five annual withdrawals, when a first withdrawal of $29263 is made at the end of year 11, and subsequent withdrawals increase at the rate of 10% per year over the previous year's, if the interest rate is 10%, compounded annually? Draw the cash flow diagram and use interest rate with five decimal places.1. What is the exact simple interest on $2,800 for the period from February 12 to july 6 of 1996, if the rate of interest is 4%? 2. You owe $120,000 from your ex-girlfriend and promise to pay 6% simple interest. How much will you pay at the end of 1 year and 6 months? 3.You owe $120,000 from your ex-girlfriend and promise to pay 6% simple interest. How much will you pay at the end of 9 months?Suppose that you are considering subscribing to “ABC” magazine. The magazine is advertising a one-year subscription for $60 or a three-year subscription for $166. You plan to keep getting the magazine for at least three years. The advertisement says that a three-year subscription saves you $14 compared to buying three successive one-year subscriptions. If the interest rate is 10%, should you subscribe for one year or for three years? (Assume that one year from now a one-year subscription will still be $60.)
- 1. 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?Suppose a state lottery prize of $2 million is to be paid in 20 payments of $100,000 each at the end of each of the next 20 years. If money is worth 11%, compounded annually, what is the present value of the prize? (Round your answer to the nearest cent.) $find the present value of $175 perpetuity if the interest rate is 6 percent compounded quarterly. payments are at the beginning of the period.