Find the present value on January 1, 1992, of the sum which is due on the specified date, if money can be invested at the given rate: a. ₱ 2,000 due on July 1, 1994; 9% compounded quarterly b. ₱ 12,000 due on January 1, 2000; 7% compounded monthly.

Find the present value on January 1, 1992, of the sum which is due on the specified date, if money can be invested at the given rate: a. ₱ 2,000 due on July 1, 1994; 9% compounded quarterly b. ₱ 12,000 due on January 1, 2000; 7% compounded monthly.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 3CE

See similar textbooks

Related questions

Q: Find the present worth of perpetuity of Php10,000 payable quarterly if money is worth 10% compounded…

A: Quarterly payment = Php 10,000 Interest rate = 10% Quarterly interest rate = [{1+(0.10/12)}12]1/4-1…

Q: If interest is 5% compounded annually, calculate the present value of five year cash flows of $1,000…

A: The present value function or concept can be used to determine the present value of a future sum or…

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: Find the FV (Future Value) at the end of the last payment period. Payments of RM1000 each are made…

A: Annual payment (A) = RM 1000 n = 3 years r = 5% Let's calculate the present value first.

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: 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: If money is worth 5% compounded semi-annually, find the present value of a sequence of 12…

A: The present value of annuity needs to be calculated at the end of 4th year. Post that, the present…

Q: What is the total amount available upon the deposit of the sixth payment if P500.00 is invested at…

A: Here an amount of 500 is being deposited each year for 6 years and we have to find the total amount…

Q: (a) Given the effective rate of interest as 7.5%, calculate the present value which will provide…

A: Present value is the future value discounted using the interest rate and time period. Present value…

Q: What is the present value of Php100,000 received in fifteen years with an annual discount rate of 5%…

A: Present value discount factor = 5%, 15 years = (5%/12), (15 years x 12 ) = 0.42%, 180 = 0.47310

Q: If money is worth 8% compounded quarterly, compute the present value of the perpetuity of ₱1,000…

A: Perpetuity is the stream of cash flows or payments that are made at equal intervals that do not have…

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

A: Given:

Q: If the money invested will earned P200,000 after 10yrs at 16% compounded annually, what is the…

A: Let the principle Amount be X It can be calculated by following formula FV = PV* (1 + r / n)nt…

Q: What lump sum of money – deposited today – will accrue (grow) to a future value of $15,000 at 3 1/2%…

A: Given data; Future value = $15,000 interest rate = 3 1/2% = 3.5% number of years = 5 1/2 = 5.5 years…

Q: If money is invested at 12% compounded semiannually, find the present value of P3,000 due at the end…

A: Amount due (F) = P 3000 r = 12% per annum = 6% semiannually n = 3.5 years = 7th semiannual period…

Q: How is the accumulated value 12,373.78 if yearly payments of 20,000 are made?

A: Solution:- When an equal amount of payment is made each period at the beginning of period, it is…

Q: Suppose a principal of 2500 Rials accumulated to 4000 Rials over a period of 8 years. Determine the…

A: The nominal rate can be computed with the help of future value function and logarithm values.…

Q: For the following exercise, use the compound interest formula, A(t) = P 1 + r n nt , where…

A: Compound interest formula: where A is the accumulated value P is the invested principal r is the…

Q: What is the present value of an annual annuity payment of Php7,000 made for 12 years with a required…

A: Present value of annuity due is computing the value at the end of the number of periods given using…

Q: If $4,354 is invested at the end of each year for 7 years at 0.05 compounded annually. What is the…

A: Total dollar amount available upon the deposit of the 7th payment = P{[(1 + r)^n - 1] / r}

Q: The income stream b = (1000, 1500, 2500, 4000) consists of payments made at the end of the next four…

A: The present value is calculated by discounting the cash flows at an appropriate discount rate for a…

Q: If money is worth 8% compounded quarterly, compute the present value of the perpetuity of Php1,000…

A: Given information: Annual payment of Php 1,000 payable quarterly Interest rate is 8%

Q: Calculate the compounded interest after 7 years and 9 months if 500,000 is placed at an annual rate…

A: a) Amount invested (A) = 500,000 n = 7 years 9 months = 93 months r = 11.28% per annum = 0.94% per…

Q: Rank the following from highest present value to lowest present value. A payment of $5000 to be…

A: Option 1. Payment of 5000 N = 5 Option 2. Payment of 5000 N = 2 Option 3. Payment of 2000 in 1…

Q: Find the present value of a payment of 1000 dinars at an interest rate of 3% annually, and the…

A: The question is based on the concept of present value calculation for an expected annuity cash flows…

Q: If 400,000 is deposited at the rate of 6% compounded annually at the beginning of each period for 6…

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

Q: It is known that the accumulation function a(t) = At2 + B. If RM100 is invested at time 0, the…

A: Since you have asked multiple questions , we will solve the first question for you as per policy.…

Q: 1. If $1000 is invested at 6% compounded ineterest on January 1, 1990, how much will be accumulated…

A: according to the rule, because you have posted multiple questons, we will answer the first question…

Q: Please answer both. What is the present value of annuity of Php 15, 000.00 at the end of 10 years…

A: The current value of a future sum of money or stream of cash flows given a specified rate of return…

Q: If the rate of earnings is 12% and the cash to be received in two years is $20,000, determine the…

A: Present value amount = Cash to be received in two years x present value of $1 at compound interest…

Q: ASE TYPE IT AND NOT HANDWRITTEN Find the amount and the present value of P15,000 payable every…

A: Present value is the future deposits can be calculated by using the present value factor annuity and…

Q: An amount of R30 0000 is deposited into an account now, at a rate of 3,9% pa. Three years from now…

A: Given: Deposit amount = 300000 Interest rate = 3.9% Additional amount = 170000 New interest rate =…

Q: A certain end of year cash flows are expected to be P 7,000.00 at the end of the 3rd year, P…

A: Present value: Present value is the future cash flow at a specific discount rate. The time value…

Q: Suppose an amount of Php 18000 is invested in an account with an annual rate of 4.5% continuously…

Q: At what nominal rate compounded semi-anually will Php5,000 amount to Php 6,000 in 2 years? Round off…

A: Present Value PHP 5,000 Value of Land after 5 years PHP 6,000 A = P[1+(r/n)]^ntWhere A…

Q: Suppose that a cash flow will have a uniform annual payment of Php 1,200 for the first four years,…

A: Equivalent uniform annual payment of cash flow is the amount which is equal every year but…

Q: For a sum of money interetsed at 4% compunded semi- annually for 5 years. a) nominal rate of…

A: a) Nominal rate of interest is the stated rate on the investment Nominal rate of interest “j” = 4%…

Q: Determine the present value of $210,000 to be received at the end of each of four years, using an…

A: Formula: Present value of Amount = yearly Amount x PV factor Multiplying yearly amounts with PV…

Q: What is the future value of a stream of $800 cash receipts, each to be received at the beginning of…

A: Given data; payment amount = $800 interest rate = 10% number of years = 4

Q: At what nominal rate compounded semi-annually will Php5,000 amount to Php6,000 in 2 years? What is…

A: Calculation of nominal and effective interest rate :: Amount of principal:::Php5000.. Amount payable…

Q: What is the present value of $10,000 that is to be received in 9 years, if the discount rate is 7%…

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

Q: What present sum is equivalent to a series of P1,000 annual end-of-year payments, if a total of 20…

A: Given: Annual payment = P1,000 Period = 20 Interest rate = 12%

Q: Determine the present value of $200,000 to be received at the end of each of four years, using an…

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

A: Annual Payments = 120,000 N = 6 Beginning of period payments Annual Compounding Interest Rate = 15%…

Q: ten annual installments of 65,000 pesos each starting at th end of the eleventh year from now , is…

Concept explainers

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.

Question

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 3 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

Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due. Present value of $800 per year for 10 years at 14%: $ Present value of $400 per year for 5 years at 7%: $ Present value of $800 per year for 5 years at 0%: $
Calculate the compounded interest after 7 years and 9 months if 500,000 is placed at an annual rate of 11.28 percent compounded monthly. On January 1, 1988, a total of 5,200,000 was deposited at a rate of 24.50 percent compounded semi-annually. What was the value of the sum on January 1, 1993? 3 decimal places
Assume that $1,000 is deposited today, two years from now, four years from now, six years from now, and eight years from now. At 8% interest compounded annually, determine the future value at the end of year 9. (a) $4,174(b)$7,521(c) $2,085(d) $1,895
If Php 5,000 becomes Php 9,734 after 12 years, when invested at an unknown rate of interest compounded monthly, determine the unknown nominal rate and corresponding effective rate.
If Php 1,000 becomes Php 1,811.36 after 5 years when invested at an unknown rate of interest compounded bi-quarter, determine the effective rate of interest.
Determine the amount that must be deposited now at compound interest to provide the desired sum. (Present value of a single payment, lump sum, $1 dollar) A. Amount to be invested at 8%, compounded semiannually, in order to have $17,000 in 10 years. B. Amount to be invested at 13%, compounded annually, in order to have $150,000 in 30 years.
Using the appropriate PV table, compute the present value of the following amounts: a. $24,000 payable at the end of each year for 5 years with 12% interest compounded annually.b. $16,000 receivable at the beginning of each semiannual period for 20 years with 10% interest compounded semiannually.c. $3,000 payable at the beginning of the seventh, eighth, and ninth years at 3% compounded annually.
The sum of P15, 000.00, deposited in an account earning 4% per annum compounded quarterly, will become P18, 302.85. Determine the effective rate of interest per year.
Find the present worth of perpetuity of Php10,000 payable quarterly if money is worth 10% compounded monthly. Answer: 396,683.772
Using the formula for the time value of money, if a sum $15,000 is invested for one year at 10% interest compounded quarterly, the future value of that money is: a. $16557 b. $16600 c. $16500 d. $18000
Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due. Future value of $800 per year for 10 years at 12%: $ Future value of $400 per year for 5 years at 6%: $ Future value of $800 per year for 5 years at 0%: $
A sum of money amounts to 9800 after 5 years and 12005 after 8 years at the same rate of simple interest. The rate of interest per annum is :