Answered: calculate the amount of annual payment…

calculate the amount of annual payment given that the interest rate is 7%, amount to be received at maturity is $25000, and the number of years is 10.

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter1: Understanding Personal Finance

Section1.4: Perform Time Value Of Money Calculations

Problem 3CC

See similar textbooks

Related questions

Q: If you invest P10,000 with a rate of interest of 12% compounded annually, compute the interest of…

A: Investment amount (I) = P 10000 Interest rate (i) = 12% Inflation (f) = 10% n = 10 years

Q: What is the present value of 10 equal payments of $16,500 to be made at the end of each year for the…

A: Present value of equal payments = equal payments x PVIAF (10%, 10 years)

Q: Consider the case where the Annual Percentage Rate (APR) is 15%. If the frequency of compounding is…

A: Annual Percentage rate = 15% Compounding = Quarterly Number of compounding per year = 4

Q: What is the value today of receiving $8,000 at the end of each six-month period for the next four…

A: Periodic Payment (End of every 6 months) = $8,000 Interest Rate p.a. = 8% p.a. Six Month Interest…

Q: What single investment made today, earning 10 % annual interest, will be worth 10,000 TL at the end…

A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want…

Q: Consider a $5,000 deposit earning 10 percent interest per year for 10 years. What is the future…

A: The value of the cash flow after a particular time period with the addition of the interest amount…

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: $4200 is invested for 9 months at an annual simple interest rate of 12%. How much interest will be…

A: Simple interest is interest calculated on the principal investment, i.e no interest will be…

Q: Find the uniform annual amount that is equivalent to a uniform gradient series in which the ﬁrst…

A: Calculation is as follows:

Q: You are considering taking out a loan of 20,000 that will be paid back over 7 years with monthly…

A: Interest amount decreases and the principal paid amount increase as loan payments proceed further.

Q: Suppose that you deposit $200 at the end of each month into an account paying an expected annual…

A: given, monthly compounding N =10 x 12 = 120I =3%12PV =0PMT =200 FV = need to find

Q: What is the present value of twelve annual payments of $5,000, starting today if the interest rate…

A: Annual payment = $ 5,000 Annual interest rate = 13% Number of annual payments = 12

Q: What is the value today of receiving six annual payments of $400,000, beginning one year from now,…

A: Using the scientific calculator, we can calculate the NPV of the cash flows. Enter the value as…

Q: how much would be available at the end of the time period. How much is the interest earned?

A: Time value of money (TVM) means that the money received in the present period will have more value…

Q: nual, semiannual, and quarterly compunding periods, (1) calculate the future value if $5000 is…

A: Future value can be computed using FV function in excel. FV function computes interest rate for…

Q: Tommy John is going to receive $1,000,000 in three years. The current market rate of interest is…

Q: What is the present value of $1,400 a year at a discount rate of 8 percent if the first payment is…

A: Present value or value of 23 annual payments (PMT) of $1,400 at a rate of (r) of 8% at the end of 6…

Q: How much is the present sum is equivalent to a series of P1000 annual end-of year payments, if a…

A: Annual payment (P) = P 1000 Interest rate (r) = 6% Number of annual payments (n) = 10

Q: What is the future value in 10 years of 1,500 payments received at the end of each year for the next…

A: * Note : As per policy only one question will be answered. Please refer to the image below.

Q: Given below are the future value factors for 1 at 10% for one to five periods. Interest is…

A: It is method of computing interest where interest is calculated over interest as well.

Q: Assume that time is measured in years and that interest rates are constant. A cashflow of amount…

A: Annual cashflow (CF) = £1000 Total duration (n) = 20 years Interest rate (r) = 7.3%

Q: If (P) dollars are invested at the end of each year in an annuity that bears interest at an annual…

A: The future value of a regular annuity amount can determine with the help of the future value of the…

Q: A KIMEP BANK quotes you and interest rate of 12,5% per annum with semiannual compounding. What is…

A: Interest Rate per annum with semi annual compounding(r) = 12.5% Effective Interest Rate compounded…

Q: How much should be deposited now at 7 percent compounded annually to make possible withdrawals of…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: If the current rate of interest is 6% APR, what is the future value of an investment that pays AED…

A: Because of time value, the true worth of funds keeps on changing because of interest rate,…

Q: Use the formula for computing future value using compound interest to determine the value of an…

A: Here, Principal Amount (PV) is $13,000 Annual Interest Rate (r) is 3% Compounding Period (m) is…

Q: If 14700 dollars is invested at an interest rate of 9 percent per year, compounded semiannually,…

A: The amount at the end of a specific number of years will be the future value of the initial deposit.

Q: An annuity pays $1000 per year for 12 years. Inflation is 6 percent per year. The annuity costs…

A: Internal rate of return is one of the modern techniques of capital budgeting which considers the…

Q: Assume you borrow $2000 now at 7% per year for 10 years and must repay the loan in equal yearly…

A: PV=2000 N=10 r=7%

Q: You are evaluating a growing perpetuity product from a large financial services firm. The product…

A: The cash flows that are started immediately after the investment and go on for an infinite time…

Q: What is the present worth of a uniform series of 10 payments that begin one year from now in the…

A: Present Value is the amount of money's worth on the present day which to be received/paid in future,…

Q: Use the RSTUV method to obtain the solution. If P dollars are invested at r percent compounded…

A: Given, A = P*(1+r)^2

Q: If you deposited $10,000 each year for 10 years and the interest rate is 5.00%, what is the value at…

A: INFORMATION: RATE 5% YEARS 10 PMT (MONTHLY DEPOSIT) 10000 PRESENT VALUE $0

Q: What is the future value in 10 years of 1500 payments received at the end of each year for tge next…

A: In the given question, 1,500 will be received (invested) at the end of each year for next 10 years.…

Q: With a present value of $110,000, what is the size of the withdrawals that can be made at the end of…

A: We need to use present value of ordinary annuity(payment due at end) formula to calculate the size…

Q: Determine the equivalent annual worth for years 1 through 10 of a uniform series of payments of…

A: Present worth is the current value of the amount that is expected to be received in some future date…

Q: set up an equation and solve each problem. Suppose that $500 is invested at a certain rate of…

A: Introduction Future Value: The utility of cash or an asset at a future date is referred to as…

Q: The amount of $10,000 is invested and will be worth $21,000 in nine years. What in the continuoushy…

A: Continuous Compounded Interest rate is the interest rate that is calculated on the principal amount…

Q: What is thevpresent value of an annuity of 1,600 per year for 10 years, with the first payment…

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

Q: An investment opportunity requires a payment of $750 for 12 years, starting a year from today. If…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: For 10 years with total payments of $ 10000 per year, calculate the total amount accumulated after…

A: Calculation of the total amount accumulated after 10 years: Calculation with formulae:

Q: Jorsen Kithak wishes to analyze the two cases of annuity for 10-years, C and D. Annuity C is an…

A: Annuity C = 2500 Term = 10 years interest = 10% Annuity D = 3000 Term = 10 years interest = 20%

Q: Suppose you have a loan of amount P, and you plan to pay off the debt in 10 equal annual…

A: Calculation of the PV of the seventh installment of loan is shown below: Here: P = Present Value X…

Q: Hazal has been making a series of payments at the beginning of each year for 20 years. The first…

A: The first payment is 100 TL increase by 4% each year for 10 years and decreased by 4% for next 10…

Q: avings account that yields 12% compounded quarterly, what would our investment grow to at the end of…

A: The given problem can be solved using FV and EFFECT function in excel. FV function computes future…

Q: Complete the following using compound future value. Time 13 years, Principal $16,800, Rate 2%,…

A: The amount that a present investment will gain in value over time when kept in a compound interest…

Q: How much invested now at an interest rate of 10% compounded annuallywould be just sufficient to…

A: Present value is the current worth of the amount that is expected to be received in some future…

Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

I need the excel formula to calculate the amount of annual payment given that the interest rate is 7%, amount to be received at maturity is $25000, and the number of years is 10.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
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?
Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.