Answered: How long will it take to double $1,000…

How long will it take to double $1,000 if invested at 12.25% using annual compounding? а. 7.2 years b. 6.5 years с. б уеars d. 5 years e. none of the given ones

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 14EB: How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one...

See similar textbooks

Related questions

Q: Investment If $5000 is invested for 6 years atinterest rate r (as a decimal), compounded annually,…

A: future value formula: Future value=present value×1+rateyears

Q: At what rate must Rm50,000 to grow to 406,855 IN 15 years compounded annually? Select one: a. 18%…

A: Amount Invested = RM 50,000 Amount gro in 15 years = RM 406,855 Years(n) =15 Interest rate = r% let…

Q: If you invest $20,000 at an annual rate of 1% compounded continuously, calculate the final amount…

A: The question is based on the concept of Financial Management.

Q: ind the future values of these ordinary annuities. Compounding occurs once a year. Do not round…

A: a) Future value = Annuity * [(1 + rate)^periods - 1] / rate Future value = 1000 * [(1 + 0.06)^8 - 1]…

Q: If you have PhP 5,000.00, which of the following investment alternatives would provide the greatest…

A: We will calculate wealth for each alternative, Part A) 72/100 % = .72% simple interest Value After…

Q: 2 P 20.000 is invested for 15 years at 5 % compounded semi-annually. A. Give the value of each…

A: Since you have not mentioned the specific question we will just answer the first question in case…

Q: terest, compounded monthly, for 2 years. Use the compound interest formula to calculate the compound…

A: In this we have to use future value formula to get future value.

Q: How long will it take $300 to double if it earns thefollowing rates? Compounding occurs once a…

A: Calculation of number of years: Part (a): Answer: It will take 11.90 years to double the amount.

Q: Calculate the present value PV(n dollars) of an investment that w be worth $1,000 at the stated…

A: Present value (PV) is the current estimation of a future amount of cash or stream of income given a…

Q: 1. At what rate must RM50,000 to grow to 406,855 in 15 years compounded annually? Select one: a.…

A: "Since you have posted multiple questions, we have solved the first question for you. To get it…

Q: The amount $20,000 will grow to $24,635.11 in 3.5 year(s). (Do not round until the final answer.…

A: Investors before taking any investment decisions need to calculate the current and future value.…

Q: Which alternative in the table below should be selected when the MARR = 7% per year? The life of…

A: Internal rate of return is the discount rate at which the present value of the future cash flow and…

Q: should be invested now into an 8% per annum interest-bearing account, compounded ye

A: The given problem can be solved using PV function in excel. PV function computes present worth for…

Q: An investment of R20 000 accumulated to R45 200. If the applicable simple interest rate is 12% per…

Q: ou have invested 7 million dollars for a horizon of 24 months. You will be paid interest at 7.80%…

A: Future value refers to the value of the current asset on some future date based on the growth…

Q: Calculate the present value for the cost of RM 10,000 which will be spent for 20 years if the…

A: Present value = FV / (1+r)^n Where r = interest rate per period n = no of periods FV = Future value…

Q: The present worth of P 40,000 in the first year and amounts of decreasing by P 3000 per year through…

A: First year amount = P 40,000 Annual decrease = P 3000 Interest rate = 14% Period = 5 Years

Q: If you have PhP5,000.00, which of the following investment alternatives would provide the greatest…

A: Computation:

Q: How many years are needed for P40,000 to yield P13,756.66 if invested at 6% converted semi-annually…

A: Present value (PV)= 40,000 Interest amount = 13,756.66 Rate of interest = 6% Semi-annual interest…

Q: You invested $5766 for 15 years at 6.66% per annum. How much more would you receive at the end of…

A: Investment amount = $ 5766 Interest rate = 6.66% Period = 15 Years

Q: will have a loss of P10,000 each year. Calculate the acceptability of this investment using FW…

A: Future worth of a project can be defined as value of a current asset or project at some future date.…

Q: C Bank offers Php Php 84,000 at the end of 4 years plus Php Php 240,000 at the end of 4 years Assume…

A: The question is related to Present Value. The Present Value is calculated with the help of following…

Q: Given invest $10000 an investment account paying 3.4507 interest, find the amount Mou would have…

A: Future value can be referred to as the value of an underlying asset or security at a future date.…

Q: Q) $15,000 is invested in an account at time 0. At the end of 4 years, Invested into the same…

A: Future Value Future value (FV) is the value of a current asset at a future date based on an assumed…

Q: Investment A costs P20,000 and pays back P23,000 two years from now. Investment B costs P16,000 and…

A: The concept of the time value of money states that the value of cash or money has a higher worth…

Q: You invest $50,000 for three years that will earn 3.6 percent compounded continuously. What will be…

A: Given Information: Amount invested=$50,000 Interest Rate=3.6% compounded continuously Time(in…

Q: If you invest $4,000 today at 10% interest, what is the value of the investment at the end of 5…

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

Q: Find the present value of an investment that will have a future value of Php350,000 if it is…

A: Present Value: It is the current value of cash flows or an amount of money that is expected in the…

Q: Susan Bertrees can invest $12,000 at 2% interest compounded twice a year or compounded quarterly. If…

A: The difference between the interest can be computed by calculating the difference in future value of…

Q: a) How much should you invest at 12% interest today if you want to receive TK. 10,000 at the cnd of…

A: Hi, there, Thanks for posting the question. As per our Q&A honor code, we must answer the first…

Q: 1. If an investment over nine years at a rate of P288.00 results in a final balance of P1,088.00,…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: 5. Which of the following statements is true about annuity? A. It is a series of payments of equal…

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

Q: f you put up $41,000 today in exchange for a 5.1 percent, 15-year annuity, what will the annual cash…

A: Present value (PV) = $41000 Interest rate (r) = 5.1% Number of annual payments (n) = 15

Q: wo payments of $16,000 and $6,800 are due in 1 year and 2 years, respec alculate the two equal…

A: Present value of money would give the required money today that is equivalent to future payment to…

Q: Suppose you have an investment worth $800 and you want it to increase in value by 400%. a) What is…

A: Investment amount = $ 800 Increase in value = 400%

Q: An investment pays $2,000 every third year for 45 years (a total of 15 payments). Your opportunity…

A: Annuity amount per three years is $2,000 Total number of payments are 15 Interest rate compounded…

Q: Use the compound interest formula to calculate the compound amount (in $) for your investment.

A: Future Value: It is the future worth of the investment amount or a sum of money compounded at a…

Q: An investment is providing a scholarship worth $4720 every year indefinitely. What is money invested…

A: Perpetuity: Perpetuity is the series of fixed payments which is incurred or received for the…

Q: If you invest $7,000 at 12% compounded continuously, how much would it be worth in three years? (a)…

A: Introduction: The amount which is invested today is referred to as present value. The amount that is…

Q: 2. How much should be invested now (at present time) at 8% compound interest per year, in order to…

Q: An investment of $20,000 earns 7.5% interest. Find the value after 15 years if the intrest is (a)…

A: Given below is the formula for Simple interest, where P is the Principal, r is the rate of interest…

Q: What is the present value of P300,000 due at the end of 2 years, if the money is worth 8% compounded…

A: Thhe formula to calculate present value is: Present value = Future value / (1 + Rate)^Time

Q: How long RM152,091.826 grow to RM708,900 with a 8% compounded annually? Select one: a. 15 years…

A: Using the Nper function

Q: An investment of $2500.00 earns interest at 8.25% p.a. compounded monthly for 3 years. At that time…

A: Given, Present value (PV) = $2,500 Rate of interest (r) = 6% Number of periods compounded quarterly…

Q: If you put up $55.000 1oday in exchange for a 6.5 percent, 16-year annulty. whal wil the annual cash…

A: The given problem can be solved using PMT function in excel. PMT function computes savings/…

Q: What will be the future worth of money after 1 year, if the sum of P25,000 is invested today at a…

A: Future value of sum can be calculated with the help of future value function.

Q: Which among the following is the present value of Php 40, 000 due in 6 years if money is worth 10%…

A: present value=future value1+rn r=rate of interest n=number of years

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

How long will it take to double $1,000 if
invested at 12.25% using annual
compounding?
а. 7.2 years
b. 6.5 years
с. б уеars
d. 5 years
e. none of the given ones

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 to Question:

VIEW

Step 2: Calculation of time period:

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 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%
Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years. What is the NPV using 8% as the discount rate?
If you invest $12,000 today, how much will you have in (for further Instructions on future value in Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at l5% D. 19 years at 18%
An investment of 1,000 produces a net cash inflow of 500 in the first year and 750 in the second year. What is the payback period? a. 1.67 years b. 0.50 year c. 2.00 years d. 1.20 years e. Cannot be determined
How much would you invest today in order to receive $30,000 in each of the following (for further instructions on present 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%
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.
Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in year two, $2,000 in year three. $2,500 in year four, and $2,000 in year five. What is the NPV using 8% as the discount rate? For further instructions on net present value in Excel, see Appendix C.
How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
Effective Cost of Short-Term Credit Yonge Corporation must arrange financing for its working capital requirements for the coming year. Yonge can: (a) borrow from its bank on a simple interest basis (interest payable at the end of the loan) for 1 year at a 12% nominal rate; (b) borrow on a 3-month, but renewable on rate with 12 end-of-month payments; or (d) obtain the needed funds by no longer taking discounts and thus increasing its accounts payable. Yonge buys on terms of 1/15, net 60. What is the effective annual cost (not the nominal cost) of the least expensive type of credit, assuming 360 days per year?
If K40, 000 is deposited at the end of each half year in an account that earns 6.2% compounded semiannually, how long will it be before the account contains k1, 200, 000? b. When you establish a sinking fund, which interest rate is better? Explain.i. (a) 10% (b) 6% ii. (a) 12% compounded monthly (b) 12% compounded annuallyc. If k2500 is deposited at the end of each quarter in an account that earns 5% compounded quarterly, after how many quarters will the account contain k80, 000?d. A lottery prize worth k 2,400,000 is awarded in payments of k 20,000 at the beginning of each month for 20 years. Suppose money is worth 7.8%, compounded monthly. What is the real value of the prize?e. A couple who borrow K90, 000 for 30 years at 7.2%, compounded monthly, must make monthly payments of K610.91. (a) Find their unpaid balance after 1 year.(b) During that first year, how much interest do they pay?f. The first term of a GP represents the number of tins of beans sold in Food Lovers the week before…