A payment of $1,750 is due in 2 years, and $5,800 is due in 5 years. What single payment made today would be equivalent to these original payments? Assume that money earns 4.25% compounded semi-annually

Q: Two payments of $9,000 and $5,300 are due in 1 year and 2 years, respectively. Calculate the two…

A: Payment due in Year 1 is $9,000 Payment due in year 2 is $5,300 Interest rate is 9% Compounded…

Q: Firm ZLC will be receiving payments of $10,000 per month for consulting services, with first payment…

A: Future value of annuity The future value of annuity refers to the total value of the investment at…

Q: What amount must be set aside now to generate payments of $20,000 at the beginning of each year for…

A: Working note:

Q: A payment of $15,000 is due in 1 year and $11,000 is due in 2 years. What two equal payments, one in…

A: Compounding is a technique which is used to compute the future value (FV) of the present amount by…

Q: What is the quarterly payment on a loan of $22,000 for 5 years at i= 8% per year, compounded…

A: Mortgage/ Borrowings:  Borrowings are the loan which is taken by the individual to meet its…

Q: Two payments of $18,000 and $3,700 are due in 1 year and 2 years, respectively. Calculate the two…

A: Compound interest is a type of the interest which is charged on the loan. Compound interest is…

Q: 1. Compute the difference in the future amount of P500 compounded annually at nominal rate of 5% and…

A: Hi, Thanks for the question. Since you asked multiple questions, we will answer the first question…

Q: Payments of $4,000, $5,200 and $6,500 are due infourmonths, sixteen months and eighteen months…

A: In this we need to calculate all values after 1 year.

Q: $25,000 is borrowed at an annual compound rate of 8%. The loan is repaid with 5 annual payments,…

A: Loan amount is the amount that is borrowed

Q: At what effective rate, a single payment of $ 1,500.00 today is equivalent to two payments of $…

A: An annuity is a series of equivalent periodic cash flows that contain a fixed amount occurring at…

Q: a series of 12 annual payments of $2400 is equivalent to three equal payments, one each at the end…

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: How many semi-annually payments will it take for $550.00 deposited at the end of each half year to…

A: Future value (FV) = $12500.00 Semi annual deposits (PMT) = $550 Compounding per year (C/Y) = 12…

Q: A payment of $35,000 is due today. What three equal payments, one in 2 years, one in 4 years, and…

A: Let the equal payments = X The payments are to be made in year 2, 4 and 7. Interest rate = 4.5%…

Q: If money earns 5.22% compounded quarterly, what single payment in two years would be equivalent to a…

A: The time value of money is a concept that is applied while computing the present worth of the money…

Q: The total maintenance expense of a certain machine is 15,845 and can be disbursed by paying 3,458 at…

A: Annual equivalent cost is that is equivalent to the cost today considering the interest rate and…

Q: $25,000 is borrowed at an annual compound rate of 8%. The loan is repaid with 5 annual payments,…

A: P= $25,000 Rate= 8% compounded annually Time= 5 year (annual payments)

Q: A service car whose cash price was ₱ 540,000 was bought with a down payment of ₱ 162,000 and monthly…

A: Annuity is a payment made in a fixed interval into a deposit or annual payment made for discharge of…

Q: Two payments of $14,000 and $3,400 are due in 1 year and 2 years, respectively. Calculate the two…

A: To replace the payments of different periods, we will first compute the NPV of payments to be…

Q: A payment of $17,000 is due in 1 year and $11,000 is due in 2 years. What two equal payments, one in…

A: Given : Annual interest rate is 3.25% So quarterly interest rate = 3.25/4 = 0.8125% We assume two…

Q: Two payments of $18,000 and $2,200 are due in 1 year and 2 years, respectively. Calculate the two…

A: Compounding refers to the power of increasing the interest on the total investment . It actually…

Q: Two payments of $12,000 and & 3,400 are due in 1 year and 2 years, respectively. Calculate the two…

A: Discounting is a technique to compute present value (PV) of future cashflows by considering…

Q: A payment of $23,000 is due today. What three equal payments, one in 2 years, one in 4 years, and…

A: The equivalent periodic cost is the periodic payment made towards the acquisition of an asset or…

Q: Two payments of $7,500 each must be made three years and six years from now. If money can earn 8.4%…

A:

Q: Determine the present value of 15 equal quarterly payments of P1,200 where the first payment starts…

A: Solution Concept To get the present value of the future values , we need to discount the future…

Q: If money is borrowed today with an amount of P50,000.00 and subjected to a 9% compounded quarterly…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: A payment of $12,000 is due in 1 year and $10,200 is due in 2 years. What two equal payments, one in…

A: Compounding is a process that uses an appropriate rate or CVF to calculate the future value (FV) of…

Q: A loan of P50,000 is to be amortized by paying quarterly in 1 year. If money is worth 10% compounded…

A: Quarterly payment = Q Loan amount (L) = P 50000 r = 10% per annum = 2.5% per quarter n = 1 year = 4…

Q: Emily Fashion Shop owes P24,000 due in 1 year with interest at 18% compounded monthly, and P35.000…

A: Present value of P24,000 due in 1 year @ 18% compounded monthly would be:

Q: What is the equal-payment series for 10 years that is equivalent to a payment series starting with…

A: Given information: Initial amount is $10,000 Decreases by $1,000 over 10 years Interest rate is 7%

Q: A person owes $1000 due in two years and $4000 due in 6 years. Using an interest rate of 12%…

A: In the given question we require to calculate the present value of $1000 due in two years and $4000…

Q: A loan of $28,000.00, made 6 months ago, will be repaid by 3 equal payments – one today, one in 11…

A:

Q: If money is woth 5 1/2% compounded annually, what single payment now equivalent to 45 annual…

A: Deferred annuity is a type of annuity in which the payment of annuity series began after a specified…

Q: A scheduled payment of $5,500 due in one year is to be replaced with two payments: the first due in…

A: Time value of money shows that the money available today is worth than the money in the future.

Q: A payment of $13,735 is due in 1 year, $19,500 is due in 4 years, and $8,900 is due in 7 years. What…

A: Payment due in year 1 (P1) = $13735 P4 = $19500 P7 = $8900 Interest rate = 5.5% monthly compounded

Q: A payment of $23,000 is due today. What three equal payments, one in 2 years, one in 4 years, and…

A: Given That: P.V=$23000 Payment is done in 3 equal payment Rate of interest= 4.25% Duration= 6 years…

Q: What amount of money is equivalent to receiving ₱5,000 two years from today, if  interest is…

A: We need to use present value formula to calculate the amount of money equivelent today(present…

Q: How long will it take the money to double itself if invested at 16% compounded quarterly? In how…

A: Convert 16% compounded quarterly to its equivalent interest rate for annual interval. Here, 'r'…

Q: A payment of $14,455 is due in 2 year, $18,000 is due in 4 years, and $8,450 is due in 7 years. What…

A: The question is based on the concept to calculate present value of expected future cash flows at…

Q: y is equivalent to receiving $10,000 three years from today, if interest is compounded quarterly at…

A: The present value of future money would give the amount of money that is equivalent today…

Q: A payment of $2,690 was due two years ago, and a payment of $1,650 is due today. What single payment…

A: This question can be solved in light of time value of money and future value. The formula to…

Q: A payment of $12,000 is due in 1 year and $11,500 is due in 2 years. What two equal payments, one in…

A: The present value method uses the discount rate to find the present values of the cash flows.

Q: A payment of $11,710 is due in 1 year, $19,500 is due in 4 years, and $8,400 is due in 6 years. What…

A: The screenshot of the above sheet along with formulas is given below for your reference. The Single…

Q: You borrow 10.000 USD for 4 years to be paid with equal installments. The rate is 10%  a-what is…

A: Remaining principal after a certain time period denotes the outstanding principal at the end of that…

Q: A loan of $8000 will be discharged by a cash payment of $3200 now; $1800 at the end of 4 years; $600…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: Payments of $1300 due today and $1800 due in 1_34 years are to be replaced by a single payment four…

A: given, rate = 2% m=4 let cashflow at year 4 = A year cashflow 0 1300 1 1800 3 1800 4 1800…

Q: What equal payments in 2 years and 5 years would replace payments of $35,000 and $87,500 in 7 years…

A: Here the present value of two payments to be made at the end of 7 years and 9 years should be equal…

Q: A scheduled payment of $3,500 due in one year is to be replaced with two payments: the first due in…

A: Scheduled payment in 1 year (12 months) (X) = $3500 Replacement payment 1 = R1 in 9 months…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.