Ali wants to choose a better option for making investment, help him to decide which the better option is by calculating time value of money for the following: a) An investment of OMR. 40000 in a Bond which pays 6.75% interest for 10 years b) A Bank deposit of OMR. 40000 which pays 6.75% interest for 10 years but compounding is done half a year.

Ali wants to choose a better option for making investment, help him to decide which the better option is by calculating time value of money for the following: a) An investment of OMR. 40000 in a Bond which pays 6.75% interest for 10 years b) A Bank deposit of OMR. 40000 which pays 6.75% interest for 10 years but compounding is done half a year.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
Fatema wants to choose a better option for making an investment, help him to decide which is the better option by calculating the time value of money for the following: ich pays 6.75% interest for 15 years. a) An investment of OMR. 40000 in a Bond b) A Bank deposit of OMR 40000 which pays 6.75% interest for 15 years but compounding is done quarterly. c) Which of the two options should Abdullah accept? Why
Abdullah want to choose a better option for making investment, help him to decide which the better option is by calculating time value of money for the following: a) An investment of OMR. 50000 in a Bond which pays 6.75% interest for 15 years. b) A Bank deposit of OMR. 50000 which pays 6.75% interest for 15 years but compounding is done quarterly. c) Which of the two options should Abdullah accept? Why d) Assume yourself in place of Abdullah and share which investment would you prefer from the available investment opportunities in Oman? ijis Jia
Abdullah want to choose a better option for making investment, help him to decide which the better option is by calculating time value of money for the following: a) An investment of OMR. 50000 in a Bond which pays 6.75% interest for 15 years. b) A Bank deposit of OMR. 50000 which pays 6.75% interest for 15 years but compounding is done quarterly. c) Which of the two options should Abdullah accept? Why d) Assume yourself in place of Abdullah and share which investment would you prefer from the available investment opportunities in Oman? is Ji.