Engr. Velasco decided to subscribe in a globe promo which must be paid P 3,043 per month for five years. However, the payment will start three years after from today. If the payment is 3% compounded monthly. How much is the value of the money today?

Engr. Velasco decided to subscribe in a globe promo which must be paid P 3,043 per month for five years. However, the payment will start three years after from today. If the payment is 3% compounded monthly. How much is the value of the money today?

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: Suppose you paid 5900 pesos as a down payment on a MIO SPORTY motorcycle. The remaining balance is…

A: Answer: Calculation of the future value: Step 1: Calculation of the future value of 5900 pesos:…

Q: You are to pay a bill in Meralco every month for 5 years. The accumulated amount of the payment you…

A: A deferred annuity is an agreement with an insurance broker to pay the owner a monthly income or a…

Q: How much must be deposited at the beginning of each year in an account that pays 3% compounded…

A: Time value tells that amount received today is of more value than that of receiving the exact value…

Q: You are to pay a bill in Meralco every month for 5 years. The accumulated amount of the payment you…

A: Annuities are financial contracts that provide a stable cash flow, typically to retirees. The…

Q: John Perez receives P 90,000.00 credit for his old automobile when buying a new model costing P…

A: The question can be solved as follows:

Q: The cost of the book is P1,000,000 which will amortized for 3 years monthly but he will start paying…

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

Q: If money is worth 8% annually, what annual payment is required to raise ₱ 18,811 after 2 years if…

A: Future Value of Annuity Due = (1 + r) x P x [{(1 + r)^n} - 1] / r

Q: Engr. Odon is paying a loan five thousand pesos 5% monthly for 3 years. If the payment is to start…

A: future value formula: future value =present value ×1+rn where r=rate of interest n=number of years…

Q: A car was bought on an installment basis with a monthly installment of P30,000 for 60 months. If the…

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

Q: If you save $1,900 at the beginning of every year for ten years, for how long can you withdraw…

A: Annuity refers to a cashflow screen of equal amount at equal time intervals or in simple words…

Q: How much should I invest today and expect a reimbursement every other month with a ROR of 0.1…

A: Annual interest rate = 0.10.1 Bi monthly interest rate (r) = 0.1/6 = 0.016666667 Period = 4 years…

Q: Carlo paid P 13,500 after two years to fully pay his loan that costs P 10,000. What is the interest…

A: Loan to be repaid on maturity = C* ( 1+i)n Where C is the amount of loan borrowed i is the periodic…

Q: You decide to make regular deposits every 2 weeks into an account that earns 5% annual interest,…

A: The future value of the deposits is $29,000. The annual interest rate is 5%. The maturity period is…

Q: Engr. Velasco decided to subscribe in a globe promo which must be paid one thousand pesos per month…

A: The regular or lump-sum amount that is received or paid after a specific time period rather than…

Q: How much should I invest today and expect a reimbursement every other month with a ROR of 0.11…

A: An annuity is a stream of equivalent periodic cash flows over a specific period. In this stream,…

Q: Engr. Velasco decided to subscribe in a globe promo which must be paid one thousand pesos per month…

A: Our first task is to determine the present value of 1,000 pesos per month for 5 years @ 8%…

Q: ZLX Inc owes a consulting firm $1,256,300, payable in 12 months. To fund this bill today, how much…

A: Amount payable $1,256,300 Rate is 4% compounded monthly

Q: Malik took out a loan for $27,800 from CIBC at 5.51% compounded quarterly, and will be making…

A: We need to use financial calculator to solve this problem where P/Y =Payments par year C/Y…

Q: What is the size of the payments that must be deposited at the beginning of each 6-month period in…

A: Future value (FV) = $150,000 Interest rate = 7.6% Semi annual rate (r) = 7.6%/2 = 3.80% Period = 18…

Q: Engr. Odon is paying a loan five thousand pesos 4% quarterly for 3 years. If the payment is to start…

A: present value of annuity: pva=A×1-11+rmm×nrm where, A=annuity r=rate of interest m=frequency of…

Q: • You are to pay a bill in Meralco every month for 5 years. The accumulated amount of the payment…

A: Future value = Annuity * FVAF ( rate, years ) * FVIF ( rate, years )

Q: What is the size of the payments that must be deposited at the beginning of each 6-month period in…

A: The equivalent annual cost is the periodic payment made towards the acquisition of an asset or…

Q: If money is worth 6% annually, what annual payment is required to raise P 17,909 after 5 years if…

A: The Future Value of an annuity due is the total future value of each cash flows which is made at the…

Q: You borrow $1,000,000 at 3% compounded semi-annually and will pay it off over bi-weekly (every two…

A: Amount borrowed= $1,000,000 Rate= 3% compounded semi-annually Time (n)= Bi weekly over 25 years

Q: Engr. Velasco decided to subscribe in a globe promo which must be paid P 3,043 per month for five…

A: Given Data: Monthly Payment = ₱ 3,043 Interest rate = 3% compounded Monthly

Q: You will deposit $2,000 per year for the next 10 years. Then, you will start drawing money out of…

A: Future value is the value of the present cash flows in future. Investor will deposit same equal…

Q: You borrow $1,000,000 at 3% compounded semi-annually and will pay it off over bi- weekly (every two…

A: There are two methods to charge interest on the loan taken. One is the simple interest method and…

Q: How much must be deposited at the beginning of every six months in an account that pays 5%…

A: Introduction Annuity Due represents a stream of equal payments made at the beginning of each period.…

Q: You expect to receive P1,000 at the end of each of the next 3 years. You will deposit these payments…

A: Future value: It can be defined as the value of an investment or any asset at a specified future…

Q: You are to pay a bill in Meralco every month for 5 years. The accumulated amount of the payment you…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: Kyle was supposed to pay Erin $6,700 6 months ago and $720 in 5 months. If he wants to repay this…

Q: Emily Fashion Shop owes P24,000 due in 1 year with interest at 18% compounded monthly, and P35.000…

A: Present value of P24,000 due in 1 year @ 18% compounded monthly would be:

Q: SJS Software needs to accumulate P650,000 in 2 years to meet future needs. What regular payment…

A: The monthly payment required can be calculated with the help of future value of annuity concept

Q: You are to pay a bill in Meralco every month for 5 years. The accumulated amount of the payment you…

A: If someone paid an equal amount in the difference of equal interval then it is classified as the…

Q: What is the size of the payments that must be deposited at the beginning of each 6-month period in…

A: The amount which is deposited at the beginning of every period for a specified duration is known as…

Q: If I invest PI0,387 today and expect a reimbursement every 6 months with a rate of l1.54% compounded…

A: solution : given present investment (PV) =P 10,387 rate of interest…

Q: How much must be deposited at the beginning of each month in an account that pays 6% compounded…

A: Monthly rate = 6%/12 = 0.5% Number of periods = 7*12 = 84 Future value required is $31,000 Find…

Q: A car is purchased for $6,738.81 with $2,000 down and a loan to be repaid at $100 a month for 4…

A: The balloon payment is the payment of the leftover principal amount.

Q: If money is worth 8% annually, what annual payment is required to raise P 17,059 after 1 years if…

A: The question is based on calculation of present value of future expected cash flow . The calculation…

Q: Today, Engr. Go borrowed money to be paid in 15 payments for 15 months. If the interest rate is 9%…

A: We need to use loan amortization formula to calculate loan amount or amount borrowed. P…

Q: The owner of Oak Hill Squirrel Farm deposits $3,000 at the end of each quarter into an account…

A: This question require us to compute the value at the end of 6 years, 6 months from following…

Q: What is the size of the payments that must be deposited at the beginning of each 6-month period in…

A: I/Y = rate = 6.2%/2 = 3.1% NPER = Number of years = 13*2 = 26 PV = Present value = 0 FV = future…

Q: A payment of $14,455 is due in 2 year, $18,000 is due in 4 years, and $8,450 is due in 7 years. What…

A: The question is based on the concept to calculate present value of expected future cash flows at…

Q: Gary has decided to save RM150 a month for 4 years. How much will be the balance in the account if…

A: In compound interest money grow with time as there is interest on the interest.

Q: Find the size of monthly payment for 2 years on P85,000 if money is worth 12% compounded monthly and…

A: N = 2 years or 24 months Loan = 85000 Nominal Rate = 12% Compounded Monthly Number of compounding…

Q: Stan Moneymaker has a bank loan for $10,000 to pay for his new truck. Thisloan is to be repaid in…

A: Each time a person makes a payment on a loan he pays some interest along with a part of the…

Q: A scheduled payment of $3,500 due in one year is to be replaced with two payments: the first due in…

A: Scheduled payment in 1 year (12 months) (X) = $3500 Replacement payment 1 = R1 in 9 months…

Q: You expect to receive P1,000 at the END of each of the next 3 years. You will deposit these payments…

A: Following is the computation of Future value at the end of the third year

Q: Onse took a loan of P2,000 that is repaid by a payment of P3,500 made 24 months later. Find the…

A: Present Value refers to the discounted value of a single cash flow or multiple cash flows today…

Question

100%

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: Introduction

VIEW

Step 2: Calculation of Present Value

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 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

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?
Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2 withdrawals: 40,000 at the end of 4 years and 50,000 at the end of 10 years. Analyze the problem to determine the required deposit, stating the procedure to follow and the tables to use in developing the solution.
You put $600 in the bank for 3 years at 15%. 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 third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of 5,000 at the end of each of the next 5 years. Assume a prevailing interest rate of 15%. The present value of an ordinary annuity of 1 at 15% for 5 periods is 3.35. The future amount of an ordinary annuity of 1 at 15% for 5 periods is 6.74. The present value of 1 at 15% for 5 periods is 0.5. How much should Electro record as the cost of the machine? a. 12,500 b. 16,750 c. 25,000 d. 33,700
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.