Determine the present value P that must be invested to have the future value A at simple interest rate r after time t. A = $5000.00, r = 15.0%, t = 3 months (Round up to the nearest cent as needed.)
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- (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%Determine the present value, P, you must invest to have the future value, A, at simple interest rate r after time t. Round answer to the nearest dollar. A=$878.00, r=13%, t=9 months
- Determine the present value, P, you must invest to have the future value, A, at simple interest rate r after time t. Round answer to the nearest dollar. A=$5,000, r=8.2%, t=5 yearsDetermine the present value P you must invest to have the future value A at simple interest rate r after time t. A= $4000.00 r=13.0% t=39 weeksfind the present value of $ 4000 due after five years if the interest rate is 10% compounded quarterly A). specify FV=? n=? r=? t= ? B). Find PV
- Compute the following with the data provided: (Show sufficient work with formulas used and all the steps involved ) A=$12, 500.00 per Quarter r=7.5% N=12 years Present Worth if the interest is compounded monthly? Future Value if the interest is compounded Quarterly: Present Worth if the interest is compounded continuously?*Using Matlab* The current amount A of a principal P invested in a savings account paying an annual interest rate r is given by A = P(1+r/n)^(nt) where n is the number of times per year the interest is compounded. For continuous compounding, A = Pe^(rt). Suppose $10,000 is initially invested at 2.5 percent (r = 0.025). a. Plot A versus t for 0 ≤ t ≤ 20 years for four cases: continuous compounding, annual compounding (n = 1), quarterly compounding (n = 4), and monthly compounding (n = 12). Show all four cases on the same subplot and label each curve. On a second subplot, plot the difference between the amount obtained from continuous compounding and the other three cases. b. Redo part a, but plot A versus t on log-log and semilog plots. Which plot gives a straight line?Compute the simple interest INT for the specified length of time and the future value FV at the end of that time (in dollars). Round all answers to the nearest cent. $12,300 is invested for 9 months at 7% per year. INT = $ ___ FV = $ __
- f ) You are evaluating a scenario that involves receiving a series of 50 annual payments , starting two years from now . The initial payment of $ 300 will be followed by payments growing with a geometric gradient of g = 0.5 % . Given an interest rate of 5.5 % , what is the present value ( P ) of the series ?For each of the following situations involving single amounts, solve for the unknown. Assume that interest is compounded annually. (i= interest rate, and n = number of years) (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1, and PVAD of $1) (Use appropriate factor (s) from the tables provided. Round your final answers to nearest whole dollar amount.) Present Value Future Value I n ____________ $ 40,000 10% 5 $ 36,289 $ 65,000 _____ 10 $ 15,884 $ 40,000 8% ____ $ 46,651 $ 100,000 ______ 8 $ 15,376 ___________ 7% 20Indicate whether the given statements is true (T) or false (F): "For a specified value of F at EOY N, P at time zero will be larger for r = 10% per year thanit will be for r = 10% per year, compounded monthly".