A pension fund is making an investment of $100,000 today and expects to receive $1,600 at the end of each month for the next five years. At the end of the fifth year, the capital investment of $100,000 will be returned. What is the internal rate of return compounded annually on this investment?

Q: If $20,000 is invested today and $20,000 is invested at the beginning of each of the next five years…

A: Compound Interest Formula is  Amount available at the end (A) = P (1+r/n)^nt                where P…

Q: You deposit $19,000 today in an investment account and the annual rate of return is 12%, what will…

A: Formulas: Future value = Present value *(1+rate)^years

Q: 2. Northern Flying Science is preparing to buy an aircraft estimated to cost $600,000 by making…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: an electrical engineer desires to set up fund by making uniform monthly end of period deposits for a…

A: first calculate the value at the end of the decade FV = 0, N = 3, PMT = 250,000, rate = (1+6%/12)12…

Q: An investment will return $125 at the end of each month for 5 years and then $250 at the end of each…

A: Value at the end of 5 years of $250 received for next 3 years every month, can be calculated as…

Q: local University is planning to invest $500,000 every 3 months in an investment which earns interest…

A: By compounding current cash flows with a specified interest rate, future value determines the future…

Q: Annual investments of $1200 are to be made at a savings and loan institution for 10 years beginning…

A: Annual Savings = 1200 End of year savings Nominal Rate = 5% Quarterly Compounding N = 10 years…

Q: What is the present value of a stream of $800 cash payments, each to be made at the beginning of the…

A: Simple Annuity due refers to the payment system where amount paid or received in eac period is not…

Q: You invested $7,000 at the end of each quarter for 8 years in an investment fund. If t balance in…

A: Solution: An amount deposited at end of every period is known as ordinary annuity. The formula for…

Q: To pay off $50,000,000 worth of new construction bonds when they come due in 20 years, a water…

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: A perpetuity with a present value of $25,000 today yields cash flows of $100 per month. The first…

A: Perpetuity involves receiving cash flow for an infinite period of time. Perpetuity calculation can…

Q: A company plans to place money in a new venture capital fund that currently returns 10.7% per year,…

A: Effective annual interest rate(EAR) refers to the real rate of return that we earn on our savings or…

Q: What is the future value of a stream of $800 cash receipts, each to be received at the beginning of…

A: Annual cash receipts (C) = $ 800 Number of annual cash receipts (n) = 4 Annual interest rate (r) =…

Q: If $82,000 is invested in an annuity that earns 5.8%, compounded quarterly, what payments will it…

A: Present value (PV) of the investment is $82,000, which would earn an interest rate (r) of 5.8%…

Q: Find the interest rate needed to accumulate $45,000 in a sinking fund in 10 years, with annual…

A: A fund that is created to repay a debt or replacement of an asset by putting an equal sum of amount…

Q: Suppose that you place $1,000 in a bank account each year for the next 20 years. How much would be…

A: Annuity means finite no. of payments which are same in size and made in equal intervals for the…

Q: You are told that if you invest $11,100 per year for 19 years (all payments made at the beginning of…

A: Present Value (PV) is current value of amount to be transacted in future. It is computed…

Q: A business needs ₱1,550,000 in eight years. How much should be deposited each quarter in a sinking…

A: Sinking Fund is a fund that is kept aside or borrowed to pay off a debt or a loan. It helps the…

Q: A pension fund is expected to produce a cash flow of $1,000 at the end of the upcoming year. This…

A: Here, Year 1 cash flows is $1000. This cash flow are increasing 10% for five years and after five,…

Q: If $84,000 is invested in an annuity that earns 5.2%, compounded quarterly, what payments will it…

A: Investment (PV) = $84000 Interest rate = 5.2% Quarterly interest rate (r) = 5.2%/4 = 1.30% Period =…

Q: If you invest P5,000 in a mutual fund extending a total annual return of 8% and you re-invest the…

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

Q: If Quail Company invests $50,000 today, it can expect to receive $10,000 at the end of each year for…

A: Net Present Value = Present value of cash inflows + Present value of salvage value - Initial…

Q: What is the present value of a $120,000 cash flow to be received at the beginning of each of the…

A: Amount  of Cash flow = $120000 at the beginning of the year Years(n) = 20 Annual rate(r) = 9%…

Q: An investment company wants to establish a sinking fund to pay off debts of $85 million which come…

A: Formulas: Future value = amount*((1+rate)^years - 1) / Rate

Q: Beginning a year from now, Bernardo O’Reilly will receive $20,000 a year from his pension fund.…

A: Present value is the current worth of future payments from the specific investment.…

Q: A company wants to deposit $500,000 per year in an investment which earns interest of10 percent per…

A: The value at the end of the 10 deposit is the future value of the first 10 deposits.

Q: A pension fund portfolio begins with $500,000 and earns 15% the first year and 10% the second year.…

A: Therefore, the time-weighted rate of return is 12.47%.

Q: If $86,000 is invested in an annuity that earns 5.6%, compounded quarterly, what payments will it…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: A person wants to make two individual investments, one today and one in six months at a rate of 18%…

A: monthly rate = 18%/12 = 1.5% X * 1.01512 + 5,000,000*1.0156 = 10,000,000 X = 3,791,163.26

Q: At the end of each year for the next 18 years you will receive cash flow of $3700 the initial…

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

Q: If 1000 pesos was deposited in a fund at the beginning of each 3 months for 10 years and money is…

A:

Q: How much would a business have to invest in a high-growth fund to receive $14,000 every month for 6…

A: Investments are the ways by which individuals and corporations park or save their money and funds in…

Q: To provide for the automation of a production process in five years, Dominion Chemicals is starting…

A: A fund that is created to repay a debt or replacement of an asset by putting an equal sum of amount…

Q: 1. Bomac Steel sets aside $5000 at the beginning of every six months in a fund to replace equipment.…

A: Compuattion:

Q: Northern Flying Science is preparing to buy an aircraft estimated to cost $600,000 by making equal…

A: a)  Size of the quarterly payment N = 5*4 =20 I/Y = 8/4 = 2 PV =0 FV = -600,000 Compute PMT

Q: If $87,000 is invested in an annuity that earns 5.6%, compounded quarterly, what payments will it…

A: The interest rate is 5.6%, compounded quarterly. Interest rate per quarter is (5.6% ÷ 4) = 1.4%. The…

Q: What is the present worth of the project, whichrequires $130,000 investment now and receives$40,000…

A: given, rate =14% Initial investment = $130,000 annual cashflow=$40,000 year=6

Q: You are looking at an investment that will make annual payments of $28,000, $32,000, $66,000, and…

A: Cahs flow 1 28000 Cash flow 2  32000 Cash flow 3  66000  Cash flow 4  99000  Discount rate…

Q: A firm is required to make a payment at the end of each year for 9 consecutive years. The annual…

A: The formula to calculate the present value of future cash inflow is C/(1+r)n, where C is the cash…

Q: An investor is considering an investment that will pay $2,150 at the end of each year for the next…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: What is the accumulated value of periodic deposits of $3,000 made into an investment fund at the…

A: Information Provided: Periodic payment = $3000 Interest rate = 4.75% compounded semi-annually Years…

Q: Suppose you are planning for retirement. At thebeginning of this year and each of the next 39…

A: Retirement fund is used for saving some portion of income by people for their retirement. It is also…

Q: The manager has 5 employees whose combined salaries through the end of this year are $300,000. If he…

A: The current worth of funds to be received in the future with one or more payments, discounted at a…

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.