Calculating Future Values Compute the future value of $1,250 compounded annually fora. 10 years at 5 percent.b. 10 years at 10 percent.c. 20 years at 5 percent.d. Why is the interest earned in part (c) not twice the amount earned in part (c) not the twice the amount earned in part (a)?

Calculating Future Values Compute the future value of $1,250 compounded annually fora. 10 years at 5 percent.b. 10 years at 10 percent.c. 20 years at 5 percent.d. Why is the interest earned in part (c) not twice the amount earned in part (c) not the twice the amount earned in part (a)?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 15PROB

See similar textbooks

Related questions

Q: 1. Solve each problem involving a single payment investment that earns compound interest. a) $8 000…

A: Time Value :— According to this concept, there is difference in value of money invested today and…

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

A: Present Value(PV) is current worth of any amount that is to be received or paid at future point of…

Q: 1) If you deposited $775 at 12% interest, what would you end up with at the end of 7 years if it was…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: Determine the present value of a 50,000, receivable to be collected after three years at an…

A: We need to compute the present value of the given amounts.

Q: Calculate the future value of the following two cases: a. LE150,000 deposited in an account that…

A: Loan amount = LE150,000 Interest rate = 8% Time period = 7 years

Q: Assume that $1,000 is deposited today, two years from now, four years from now, six years from now,…

A: The worth of today’s dollar at a future date is the future value of the dollar. For example, the…

Q: Find the present value and the amount of 9,000 ordinary annuity payable quarterly for 8 years if the…

A: An ordinary annuity is a series of equal payments made at the end of consecutive periods for a fixed…

Q: 11. What is the future value of $1,500 invested at a 6% annual interest rate (compounded annually)…

A: Amount Invested =$1,500 Years(n) = 8 Interest Rate (r) = 6%

Q: Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is,…

A: Annuities due is that type of annuity in which payments are made at the start of each period. Here…

Q: 3. If money is worth 8% compounded quarter ly, determine the present value of the following: a. An…

A: Annuity is a series of equal cash flows occurring at regular intervals. A perpetuity is an annuity…

Q: Find the compound interest and the amount if 25,000 pesos is invested for 2 years at 6% compounded…

Q: Find the present value of ₱38,140 due at the end of 6 years and 6 months, if money is worth 9 1/2%…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: 4. What's the present value of $10,000 received after 10 years appropriate interest rate is 10%,…

A: using the PV functions

Q: (Related to Checkpoint 5.2) (Future value) To what amount will $5,000 invested for 9 years at 11…

A: Future value means the value of a given asset on a specific date in the future. The future value is…

Q: (Related to Checkpoint 5.2) (Future value) To what amount will $4,800 invested for 9 years at 9…

A: Present value = $4800 Interest rate = 9% Period = 9 Years

Q: If $1000 is invested for ten years at an annual rate of 7.3% compounded monthly.…

A: given information present value = $1000 time period = 10 years interest rate = 7.3% annum

Q: What would the present value be of $1,000 to be received 8 years from now discounted back at 3

A: Future Value = 1000 N = 8 years Interest Rate = 3℅

Q: Assuming that money is worth 10%, compute the present value of: 1. The obligation to pay $9,000 at…

A: Introduction:- Present value is the current value of the future sum of money, at a specified rate of…

Q: 3. Calculate the amount of interest earned on $10,250 invested for 5 years at 8% compounded…

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

Q: To find the present value of a sum of sh. 10,000 to be received at the end of each year for the next…

A: The present value (PV) is the value of today's payment that is promised to be made in the future.…

Q: Calculate the total amount accumulated at the end of the 10 years if the payments are at the end of…

A: In order to calculate the accumulated amount after 10 year, we will be using the FV function of…

Q: (a) Find the present value of $12,500 to be paid 5 years from now when the interest rate is 10…

A: Answers are provided one by one in each step.

Q: 1.You have $2,500 to invest today at 9% interest compounded on an annual basis. a. Find how much you…

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

Q: Given the down payment of P18,877 and annual payment of 28,657. The number of years is 20 years and…

A: Down payment (DP)= P 18,877 Annual payment (P) = 28,657 Number of annual payments (n) = 20 Discount…

Q: Use the present value formula to determine the amount to be invested now, or the present value…

A: Present value is the value of an asset in today’s time. It the value which is worth today. It helps…

Q: of interest, compounded annually, will an investment triple itself in (a) 8 years? (b) 10 years? (c)…

A: The given problem can be solved using RATE function in excel. RATE function computes interest rate…

Q: 2. Find the present value of P30,000 due at the end of 8 years and 2 months if money's worth 15%…

A: Since you have asked multiple questions, we will solve the first question for you. Please ask…

Q: Using the following partial table of present value of $1 at compound interest, determine the present…

A: The present value method is used to evaluate the different levels of investment projects. With the…

Q: ) Find the amount to which $100 will grow at an interest rate of 16% compounded semiannually for 4…

A: 1- a initial investment =$100 interest rate =16% compounding semiannual semiannual interest =8%…

Q: (Related to Checkpoint 5.2) (Future value) To what amount will $5,200 invested for 9 years at 9…

A: Compounding is a way to compute the FV of present amount by considering appropriate rate or PVF for…

Q: is the present value of $10000 to be received 20 years from now, if the principal is invested at 8%…

A: Given, Amount to be received, A = $10,000 No. of years, n = 20 Interest rate , i = 8% or 0.08

Q: 3-10. A future amount, F, is equivalent to $1,500 now when 8 years separates the amounts and the…

A: Future value = Present value * (1+rate)^no of period

Q: Q4.02. Calculating the future value of 1,250 compounded annually for Ja. 10 years at 6 percent. b.…

A: Future Value: Using an expected rate of growth, future value (FV) is defined as the worth of a…

Q: Assuming that money is worth 10%, compute the present value of: 1. $14,000 received 15 years from…

A: Present Value: It represents the present worth of the future amount and is computed by discounting…

Q: 2. The following are exercises in present values: a. $100 at the end of three years is worth how…

A: We need to find the present values of the cashflows for part (a) to part (c). Let CFn be the…

Q: Assume a 0.05-per-year time value of money. Compute the value of $100: (a) received 1 year from now,…

A: Present value is the current worth of future payment at a given rate of interest. Formulas: Present…

Q: Calculate the present value of an annuity-due of $200 over 8 years given that the spot rates of…

A: PV of annuity due is the sum of present value of future cash flows

Q: 8. Determine the future value at the end of two years of an investment of OMR3,000 made now and an…

A: The future value of an investment is the accumulation of an initial amount at a certain rate of…

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

A: Present Value represents the present worth of the investment. This can be computed by using Excel…

Q: a. Calculate the amount deposited 1 year ago to have $1000 now at an interest rate of 5% per year.b.…

A: Interest is measured as a percentage of the amount of the loan (or deposit), charged periodically to…

Q: Principal of 3000 OMR is invested for 4 years at rate 2.5%. Find the future value if the interest is…

A: Future value can be defined as the value of a current asset at a specified future date on assumed…

Q: a) What would be the accumulated value of ₺ 100.000 in a saving account at 8% per year for 5 years…

A: Amount = 100000 Interest Rate = 8% Years = 5 for compound interest rate Years = 9 for simple…

Q: 5. Determine the amount due on the compound interest loan. (Round your answers to the nearest cent.)…

A: Since multiple questions have been asked and no questions have been specified to answer, we are…

Question

4.2 Calculating Future Values Compute the future value of $1,250 compounded annually fora. 10 years at 5 percent.b. 10 years at 10 percent.c. 20 years at 5 percent.d. Why is the interest earned in part (c) not twice the amount earned in part (c) not the twice the amount earned in part (a)?

Video Video

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

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

DIRECTION: ENCIRCLE THE BEST ANSWER. 4.) This refers to the interest rate per conversion period A Compound interest C Rate of interest B Periodic rate D. Simple interest 5) Thuis nefers to the amount paid or eames for the use of money A Conversion period C. Principal B. Interest D Rate 6) 30 months is equivalent to A 25 years B 2.75 years C 3 years D 3.25 years 1) How much is the simple interest on this financial transaction. P = .000 00. - * 6°.. and / 2 years AP120.00 B P600.00 CP1.300 00 D P6.000.00 6) What is the total number of conversion periods when a certain amount is borrowed are 10°. coupomded mouthly for 5 years? A.12 B 50 C 24 D. 60 How unch was the interest if Sophia borrowed P45.000 90 and paid a total of PS5.500.00 ar the end of the tem A PI0.500 00 CP11.500.00 B P45,000.00 D. P100.500.00 10.) What is the interest rate per conversion period if 125.900 00 was tvested at 3.4. compounded oruually for 4 years and 6 months 0033 C 0.110 B 0.330 D. 0 160 11. Jolu borowed…
1. Calculate the future value of $500 deposited today at a fixed rate of interest equal to 3.5% per year and left alone for: (Show the formula used to calculate the answers!) a. 5 years b. 10 years c. 15 years d. 20 years
(Present value) What is the present value of the following future amounts? a. $900 to be received 10 years from now discounted back to the present at 11 percent. b. $300 to be received 6 years from now discounted back to the present at 8 percent. c. $1,150 to be received 11 years from now discounted back to the present at 5 percent. d. $1,100 to be received 4 years from now discounted back to the present at 19 percent. a. What is the present value of $900 to be received 10 years from now discounted back to the present at 11 percent? $nothing (Round to the nearest cent.)
Problem 8. What is the equivalent worth in year 5 of the following series of income and disbursements, if the interest rate is 10% per year? Year Income, S 0 0 1-5 6000 6-8 6000 9-14 8000 Answer: Equation: CFD: Expense, S 9000 6000 3000 5000
Q. No. 02: Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities. a) $300 per year for 10 years at 10% b) $100 per year for 5 years at 5% c) $300 per year for 5 years at 0% d) Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due. Q.No. 03: Solve following time line, draw a clear diagram in your answer sheet. Assume opportunity cost of 12% 6 7 3 500 500 500 300 300 300 300 300 Q. No. 04: Discuss following terms with examples; a) Perpetuity b) Par Value c) Coupon Rate d) Zero-Coupon Bond
Find the equivalent future worth of the following payments. Use 6% interest rate compounded annually. Interest = 6% 238 239 240 -100 -100 -100 -100 -100 -100 -100 -50,000 2.
What is the 'future value in one year' of $106 today if the annual interest rate is 6%? A. $106.00 B. $112.36 C. $220.48 D. $100.00
What is the equivalent present value of the following series of payments: ₱ 5,000 the first year, ₱ 5,500 the second year, and ₱ 6,000 the third year? The interest rate is 8%, compounded annually. a. ₱ 15,904.22 b. ₱ 13,590.43 c. ₱ 12,573.90 d. ₱ 14,107.99
Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round your answers to the nearest cent. Nominal Rate (%) Compound Term of Interest Present Compound Amount Investment Compounded Value Interest $200,000 10 years 4 annually $ Need Help? Read It
a-1. Calculate the present value of an annual payment of $870.00 you would received for 12 years if the interest rate is 5.51%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value a-2. Calculate the present value of an annual payment of $696.00 you would received for 16 years if the interest rate is 5.51%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value b-1. Calculate the present value of an annual payment of $870.00 you would received for 12 years if the interest rate is 10.90%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value b-2. Calculate the present value of an annual payment of $696.00 you would received for 16 years the interest rate is 10.90%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value
1. In a future value of 1 table: a. b. C. a. b. Annual Rate C. 11% 8% 8% Annual Rate 11% 8% 8% Number of Years Invested Save for Later Number of Years Invested 25 16 2. In a present value of an annuity of 1 table: (Round "Rate of Interest" answers to 1 decimal place, e.g. 4.5% and other answers to 0 decimal places, e.g 45.) 7 eTextbook and Media 11 8 16 Number of Rents Involved 25 32 Compounded 28 Annually Quarterly Semiannually Frequency of Rents Annually Semiannually (a) Rate of Interest Quarterly % (a) Rate of Interest % % % % (b) Number of Periods % (b) Number of Periods Attempts: 0 of 3 used Submit Answer
A certain some of money P draws interest compounded continuously. If a certain time there are Po dollars in the account, determine the time when the financial attains the value of 2Po dollars if the annual interest rate at 2%