DIRECTIONS: Solve the following problems neatly and legibly. Draw the necessary cash flow diagrams. Box your final answer. PROBLEM 1: Determine the present worth of an annual payment of P 4500.00 : 1. If made at the beginning of the year for 12 years at 8% compounded annually. 2. If made at the end of each month for 5 years at 4% compounded monthly. 3. If 15 payments start at the end of year 4 at 6% compounded annually

Q: What lump sum would have to be deposited today into an account bearing interest of 10% per year to…

A: Lump sum payment today should be sufficient enough to enable withdrawals at T8,9,10 and 11. For that…

Q: What is the future worth of P1,000 if it is invested at 12% compounded annually for the first year,…

A: Because you have multiple questions , we will answer the first question only, for the remaining…

Q: The ABC Company has contracted to make the following payments: 500,000 immediately; 50,000 at the…

A: Year  Cash flow  PV 8% Present value  0 500,000 1.4693 734664 1 50,000 1.3604   68024.45 2…

Q: Hadji wants to find the equivalent annual cash flow for 9 years with interest rate of 15% compounded…

A: Equivalent Annual Cash Flow = PV x r / [1 - {1 / (1 + r)^n}]

Q: Pls. show the complete solution with cash flow diagrams What amount of money invested today at 15 %…

A: GIVEN, r= 15% A1= php 30,000 n1= 6 A2= php 40,000 n2= 6 A3= php 50,000

Q: Calculate the equivalent lump-sum(total) receipt now for the following cash flows: You invest $3,000…

A: Equivalent lump sum receipt: It is the equivalent value of the lump sum received at a different…

Q: If you are calculating the present value of this cash flow under semiannual (twice per year)…

A: Future Value: It represents the value of annual cash flows or the sum of money at a later/future…

Q: Depict the following transactions on a certain cash flow diagram: • Depositing $4,000 today and…

A: A cash flow diagram is a representation of cash inflows and cash outflows over a specified period of…

Q: Determine the present worth and the accumulated amount of an annuity consisting of 6 payments of…

A:

Q: A scries of cash flows begin at $15,000 the first year and steadily increasc over the next few years…

A: "Hi, Thanks for the Question. since you asked multiple question, we will answer the first question…

Q: Draw the cash flow diagram for each problem and use interest rate with five decimal places. Box your…

A: Quarterly Payments for first four years = 4500 N = 16 quarters Quarterly Payments for next three…

Q: In the given cash flow diagram : i) Calculate the equivalent amount of P. ii) Calculate the single…

A: Equivalent P means Total Present Value of all the future cash flows occurred during the five year…

Q: An amount of 50,000 was borrowed at an interest rate of 10% per year and was to be repaid over a…

A: Cash Flow Diagram: Income and expenses over some time interval are visually represented in cash flow…

Q: What deposit made at the beginning of each month will accumulate to P120,000 at 8% compounded…

A: Future Value = P 120,000 Interest Rate = 8% compounded semi-annually Time Period = 10 Years

Q: 1. What is the future worth of a series of equal yearly deposits of Php 100,000 for 8 years in a…

A:

Q: What is the present value of a perpetual stream of cash flows that pays $5, 000 at the end of year…

A: Cashflows = $5,000 Growth rate = 4%  Discount rate = 11%

Q: Answer the following questions by including the appropriate cash flow diagrams, solution, and final…

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

Q: Consider the following two cash flow series of payments: Series A is a geometric series increasing…

A: Total amount paid should be equal to the cost. Value of X will be equal to the sum of PV of future…

Q: What is the present value of the following cash-flow stream if the interest rate is 12%? You receive…

A: In the given question we require to calculate the present value of the stream of cashflows.

Q: What is the present value of a perpetual stream of cash flows that pays $2,500 at the end of year…

A: Perpetuity is a stream of identical cash flows with no end. It is a type of payment that is both…

Q: With cash flow diagram. What lump sum of money must be deposited into a bank account at present time…

A: Semi annual withdrawal = $ 1500 Number of withdrawals = 10*2 = 20 Annual interest rate = 12%…

Q: quarterly payments of $4,500 each for four years and a quarterly payments $2,000 of the next 3 years…

A:

Q: Suppose that P 4500 is deposited each year into a bank account that pays 8% interest compounded…

A: The deposits are made into account but these deposits grow with an interest rate that is compounding…

Q: What is the present value of a perpetual stream of cash flows that pays $5, 000 at the end of year…

A: Perpetuity is a stream of identical cash flows with no end. It is a type of payment that is both…

Q: If you deposit BD1,500 now, BD3,600 three years, BD2000 seven years, and BD1,800 nine years from now…

A: Deposit now = 1500 Deposit in three years = 3600 Deposit in seven years = 2000 Deposit in nine years…

Q: For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear…

A: Present Value = 100,000 N = 8 years Future Value = 341,655.49 Real Rate = 10%

Q: Show the cash flow diagram and solutions. A bank give a certain interest rate compounded…

A: Here, Present value = Php 7,000 Future value at the end of 12 years = Php28,000 Number of years = 12…

Q: Show the complete solution by showing your answer in terms of : • Cash flow diagram General Formula…

A: Here, Annual Payment is $70,000 Time Period is 12 years Interest Rate is 7% General Formula with…

Q: Draw a cash flow diagram

A: Cash flows in different periods are not comparable; therefore, we use the concept of time value of…

Q: How much money should be deposited each year for 7 years starting 1 year from today, if you wish to…

A: Let the annual deposit = A i = 8% We need to find the future value of deposits at the end of 13…

Q: Find the present worth of a future payment of 100,000 to be made in 10 years with an interest of 12%…

A: The concept of TVM states that money inherently has an interest-earning capacity which makes an…

Q: A company expects to receive the following cash flows $2,000 for the first ten years and then $3,000…

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

Q: Find the amount at the end of two years and seven months if 6,000.00 is invested at 9% compounded…

A: Investment = 6000 Interest Rate = 9% Compounded Quarterly Number of compounding periods = 4

Q: A series of cash flows starts at $1,000 at the end of the first year and increases each year for the…

A: Future value of cash flow includes the deposit and plus interest accumulated over the period of…

Q: Consider two streams of cash flows, A and B. Stream A is expected to have three cash [5] flows at…

A: In order to decide which streams of income would be preferable, one need to calculate the present…

Q: Beginning Cash Flow of Year P2,500 2 2,750 3 3,000 4 3,250 5 3,500

A: Present value is the current value of a future cash flow.   Present value of inflows=cash…

Q: You will receive the following cash flows at the end of each year for the next 5 years. Year 1:…

A: Present value of this stream of future cash flows = Cashflow discounted at 8%

Q: You borrow $10,000 from a bank for three years at an annual interest rate of 12% compounded…

A: Loan (L) = $10000 Interest rate = 12% compounded semiannually Duration = 3 years = 36 months We need…

Q: You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of…

A: given, quaterly deposit = $100 number of years = 10 annual rate = 6% withdrawal year = 20

Q: What perpetual amount will you receive annually starting next year if you were  able to deposit…

A: Here, Amount Deposited five years ago is 130,000 Interest Rate is 10.5% Compounding Period is Annual…

Q: The maintenance on a machine is expected to be $1,500 at the end of four years. This amount is…

A: Here we will have to use the concept of time value of money and then use the concept and formulas of…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.