Determine the present value of an annuity for 15 years if the interest rate is 8.8% per annum compounding monthly and payments of $72.50 are made each month. Select one: a. $7 185.66 b. $7 385.66 c. $7 085.66 d. $7 232.62

Determine the present value of an annuity for 15 years if the interest rate is 8.8% per annum compounding monthly and payments of $72.50 are made each month. Select one: a. $7 185.66 b. $7 385.66 c. $7 085.66 d. $7 232.62

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 5P

See similar textbooks

Related questions

Q: An asset costs $420,000 and will be depreciated in a straight-line manner over its 3-year life. It…

A: Data given: Cost of asset = $ 420,000 Life= 3 years Salvage value = nil Corporate tax =32% Cost of…

Q: Suppose you have $1,000,000 today and starting a year from now you intend to spend this money over…

A: Solution:- When an equal amount is spent each period at end of the period, it is called ordinary…

Q: how is financial management related to economics on the one hand and accounting on the other hand.

A: Financial Management: It refers to the planning, directing, organizing & controlling the…

Q: ABC bought a piece of land in a highly developing area for a purchase price of P4,000,000. Directly…

A: The intrinsic value of a property is the replacement cost of the property, i.e., the price of an…

Q: The Investment and Merchant bankers in managing the IPOs provide one or more of the following…

A: IPO is issue of shares of company in market for common man and later on these are listed on stock…

Q: Do you have to invest in order to create generational wealth?

A: Generational wealth-This is also known by the name legacy wealth or family wealth and generational…

Q: Wanbay Corporation is interested in estimating its additional financing needed to support a growth…

Q: what excel formula feature would you use

A: Information Provided: Price of bond = $1135.90 Years to Maturity = 10 Annual Yield to Maturity = 8%…

Q: An investor has developed projections for an investment that will generate the following stream of…

A: The future value of cash flows will be reflective of the compounded value of investment in the…

Q: What is the amount of the quarterly deposits A such that you will be able to withdraw the amounts…

A: Present value of the cash outflow must be equal to the present value of cash inflows to make both…

Q: The City of San Antonio is considering various options for providing water in its 50-year plan,…

A: Given, The cash flow for the first 4 years is $4.1 million The interest rate is 6%.

Q: grow under each of the following conditions. Do not round intermediate calculations. Round your…

A: *Answer: Initial investment (I) = $350 Period = 5 years Interest rate = 6% or 0.06 Future…

Q: A debt of $9179.58 is repaid by payments of $1797.52 in 4 months, $1295.22 in 16 months, and a final…

A: Given: Loan amount “L” = $9179.58 Payment in 4th month "P1"= $1797.52 Payment in 16th month "P2"=…

Q: traditional debt and alternative financing instruments for e

A: Entrepreneurs refer to an individual who is establishing the business, handling most of the risks,…

Q: Wanbay Corporation is interested in estimating its additional financing needed to support a growth…

Q: What is the total mortgage for a $260,000 purchase, a 15% down payment, and the closing costs shown…

A: Calculation of Mortgage value:- Purchase Value: $260,000 Down payment: 15% This means that today we…

Q: What is an option? How does an Option differ from a forward or future contract?

A: Derivative Security: A derivative is financial security whose price and value are determined based…

Q: Consider a pool of mortgages totaling $1,000,000. The interest rates is 5% and the mortgages are…

A: Information Provided: Total mortgage pool amount = $1,000,000 Interest rate = 5% Years = 3

Q: Create a word problem with a topic Matheson Formula and Double Decllining Balance Show your…

A: Matheson Formula: In this method, the annual depreciation is considered as a fixed percentage of…

Q: Assess project risk in a financial analysis discuss steps and explain importance.

A: Financial Analysis : It is the process of evaluating businesses, projects, budgets, and other…

Q: 2. A firm's bonds have a maturity of 10 years with a $1,000 face value, have a 6% semiannual coupon,…

A: No. of Semi annual Periods (n) = 5 Years * 2 = 10 Semi annual Periods Face Value = 1000 Semi Annual…

Q: when a house is purchased there is extra costs. land transfer tax 0.9% mortgage loan insurance…

A: When house is purchased there are many costs involved that are to be paid by the purchaser of the…

Q: lem 9 The financial statement of mythical Reliance Inc. show that in 2012, its beginning inventory…

A: Inventory turnover tells us that how much is inventory have been rolled out during the year.…

Q: Marty Corp is issuing a perpetual bond today that will pay $100 per year starting in 3 years. If…

A: Given: Particulars Amount Amount paid $100 Years 3 Cost of capital 5%

Q: SHOW ME HOW TO DO IT IN EXCEL (SHOW THE FUNCTIONS USED AND HOW YOU USED THEM) + CLERLY SHOW INPUTS…

A: IRR (Internal rate of return) IRR is a capital budgeting tool to decide on whether the project is…

Q: The owner of an alcohol car is concerned about government policy with regard to fuel prices. It is…

A: The equivalent annual cost is used to measure the overall cost of the asset including its…

Q: What is the intrinsic value of a stock which last paid a dividend of $1.75 and is expected to grow…

A: The two-stage dividend discount model: The dividend discount model recognizes that dividends are…

Q: Topex Sdn Bhd's management is always looking for ways to improve productivity and efficiency. This…

A: Initial cash flow is the amount new money to be invested by the company in purchase of the new…

Q: O $418 922.48

A: Present value refers to the current value of an asset of the future stream of payments in a…

Q: What is the final amount of $2696 payable every three months for 5 years and 9 months, if money is…

A: Here, Quarterly Payment is P2696 Time Period is 5 years and 9 months Time Period in Quarters (n)…

Q: A share that can be purchased for $1,173.70 will pay a quarterly dividend in perpetuity at the rate…

A: Dividend is an additional amount paid by the company to the shareholders as a return. It is an…

Q: Find the amount to which $1,000 will mature in 3.5 years at 7 ¾% p.a.

A: To calculate the future value we will use the below formula Future value = P*(1+r)n Where P -…

Q: What is the total stockholders’ equity? $

A: Information Provided: Common stock = $500,000 Additional paid in capital = $40,000 Retained…

Q: Davie bought his home several years ago with a 30-year fixed rate mortgage at an interest rate of…

A: Original Loan amount will be = Purchase price - Down payment =227000 - 40000 = $187,000…

Q: What is the future value four years from now of each of the following cash-flow streams if money can…

A: Future value can be calculated by accumulating initial value or annuity payments with the…

Q: Finance What is the YTM of a four-year semi-annual pay bond with a par value of $1,000 and a 4…

A: YTM is the yield to maturity is rate of return realized if the bond is held till the maturity of…

Q: The bank is offering to sell 6-month certificates of deposit for $9800. At the end of 6 months, the…

A: Certificate of deposits are issued by the banks at discount and that discount is interest rate on…

Q: 4 (a) Takaful provides Shariah compliant solutions to the prohibited concepts as in conventional…

A: Under Islamic finance there are rules and regulations to be followed based on the principles of…

Q: What is the present value of a constant perpetuity of $17 per year if the discount rate is 10…

A: Present Value: The present value is the present sum of a series of fixed payments. The series of…

Q: One month ago, an investor entered into a forward agreement to sell a bond in three months' time at…

A: A forward contract: A forward contract is a contract between two parties in which they agree to…

Q: how much interest will mico pay

A: PV = A[ (1-(1/(1+r)^n)/ r] Where PV = present value, A = Annuity amount. r = interest rate. n =…

Q: Why is it that oftentimes banks refuse to lend to many borrowers even though they offer high…

A: Analysis of the given option: i) To reduce the exposure to diversification risk Remark-By…

Q: Find the value of a $3000 cettificate in 2 yrs, if the interest rate is 10% compounded anually.…

A: Present Value = $3,000 Time Period = 2 Years Interest rate = 10%

Q: Henry is a college student currently working 25 hours a week at his part- time job. If Henry gets…

A: Working hours per week = 25 hours Payment per hour = $15 Number of weeks per month = 4 weeks Number…

Q: A team of analysts is using a two-stage variable growth mode to estimate the value of ABCM's common…

A: Expected Dividend in Current year = Dividend paid in previous year ×(1+Growth rate in dividend for…

Q: What is the present value of a $1,380 annuity due making payments for the next 5 years at an…

A: Present Value of annuity is that value which was invested by investor today after that investor will…

Q: Kimchi Corporation is thinking about introducing a new surface cleaning machine. The finance…

A: Given, The Initial cost of investment is $15 million The discount rate is 16%

Q: A typical equity funding cycle for a start-up is

A: A typical equity funding cycle for a start-up is option b) Angel Investment, Venture Capital,…

Q: Company Name Amazon Microsoft Ticker AMZN MSFT AAPL TSLA Apple Tesla Visa V SPOR S&P 500 ETF SPY…

A: The upward or downward movement of the market is typically measured by market indices like the…

Q: A friend of yours just invested in an outstanding bond with a 5% annual coupon and a remaining…

A: Face Value 1,000.00 Coupon Rate 5% Yield to Maturity 7% Time Period 10 Given…

Question

Determine the present value of an annuity for 15 years if the interest rate is 8.8% per annum compounding monthly and payments of $72.50 are made each month.

Select one:

$7 185.66

$7 385.66

$7 085.66

$7 232.62

Video Video

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 1 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

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
Value of an Annuity Using the appropriate tables, solve each of the following. Required: 1. Beginning December 31, 2020, 5 equal withdrawals are to be made. Determine the equal annual withdrawals if 30,000 is invested at 10% interest compounded annually on December 31, 2019. 2. Ten payments of 3,000 are due at annual intervals beginning June 30, 2020. What amount will be accepted in cancellation of this series of payments on June 30, 2019, assuming a discount rate of 14% compounded annually? 3. Ten payments of 2,000 are due at annual intervals beginning December 31, 2019. What amount will be accepted in cancellation of this series of payments on January 1, 2019, assuming a discount rate of 12% compounded annually?
Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five years. The loan will be repaid with a single payment after five years, and the interest on the loan will be computed using the simple interest method at an annual rate of 6 percent. How much will Stanley have to pay in five years? How much will he have to pay at maturity if hes required to make annual interest payments at the end of each year?
Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method. a. How much total interest will Eli pay on the loan if it is held for the full five-year term? b. What are Elis monthly payments? c. How much higher are the monthly payments under the add-on method than under the simple interest method?
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?