Answered: HOW MUCH MONEY MUST YOU INVEST TODAY IN…

HOW MUCH MONEY MUST YOU INVEST TODAY IN ORDER TO WITHDRAW P2,000.00 ANNUALLY FOR 10 YEARS IF THE INTEREST RATE IS 9%? a.P12,385.32 b.P12,835.32 c.P12,881.37 d.P12,853.32

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

See similar textbooks

Related questions

Q: Assume a consumer has current-period income y=200, future-period income y'=150, current and future…

A: Given information Current income Y=200 Future income Y'=150 Current tax t=40 Future tax t'=50…

Q: Fatima is an owner of a building and she can lease her building for 100,000 AED per year for two…

A: Accounting profit calculation only includes explicit costs. Economic profit calculation includes…

Q: Suppose that the interest rate at which Joanne can borrow and lend is 10 percent per year, but she…

A: Future value is basically the value of a current asset at a future date based on a projected rate of…

Q: What should you invest to earn 20 000 in 3 years gaining 4% effective interest? a. Php 215 614.19…

Q: 1. Let r, s > 0 be interest rates. Below is a calendar of May 2022 which describes an interest rate…

A: * SOLUTION :- (1)

Q: Cindy is considering going to law school. If she does, she will spend $70,000 on tuition and books…

A: In economics, present value refers to the current value of a future stream of cash flow. Future…

Q: How much money must you invest today in order to withdraw P 15,640 annually for6 years if the…

A: Given information, Annual amount (A): ₱ 15,640 Time period (N): 6 years Interest rate (i): 2.91%…

Q: How long does it take to become a millionaire? A $500,000 investment will hit $1 million in 42 years…

Q: 10-year government coupon bond has a face value of $1,000 and a coupon rate of 5% paid annually.…

A: Time = 10 years Face value = 1000 $ Coupon rate = 5% or 50 $ annually Current rate = 6 % annually…

Q: Describe the procedure that outlines the steps for determining the IRR for a mixed investment?

A: The internal rate of return (IRR) represents the interest rate that reduces the net present value…

Q: If Charlie invests $50,000 in a cheese company today and is offered a 5% interest rate. How much…

Q: Consider a bond with a three-year remaining maturity. A. If somehow the face value of the coupon is…

A: Given, Worth of the bond's coupon FV =$10000voucher payment (C)= $500 per yearproduce to maturity…

Q: Suppose Crystal Wilson wants to accumulate $1,000,000 by the time she retires in 40 years. If she…

A: Given, FV = $1,000,000 Time = 40 years Rate of interest = 10%

Q: 2.0%? b) Given the selling price from part (a), what was your annual rate of return from owning this…

A: The annual rate of return is the percentage change in the value of an investment. For example: If…

Q: 1. Which of the following is NOT a factor in the computation of unlevered cash flows in the Real…

A: Discounted cash flow analysis or DCF attempts for figuring out the value of an asset or a company…

Q: Exercise 4 (Basic Net Present Value Analysis) On January 2, Pebbles Cruz paid P18,000 for 900…

A: Given: The cash outflow though Ms. Cruz is = P18,000 Shares value = 900 Life = 4 years The cash…

Q: Write the equation for Net-Present-Worth Criterion?

A: Net present worth is the difference of the present worth of all cash inflows and the present worth…

Q: Assume a bond with a remaining maturity of 3 years a. If the face value is $10,000 and coupon…

A: Given Face value of coupon bond FV =$10000 Coupon payment (C)= $500 per year yield to maturity…

Q: What does the statement “interest rate 10%” signify? a The rate is effective per year. b The…

A: Effective Interest rate:- Effective interest rate can be explained as the actual return on the…

Q: 4. A P4,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at th e…

A: Simple interest is a quick and easy method of calculating the interest charge on a loan. Simple…

Q: Define the gradient-series present-worth factor?

A: Answer: Definition: Uniform Gradient Present Value ( UGPW) calculates the uniform gradient present…

Q: At 5% interest rate, how much should you invest today to be able to withdraw ₱ 3,199 annually for 7…

A: The value of money refers to the number of goods and services one can buy using it. It is calculated…

Q: A company borrows $25,000 for 3 years at an interest rate of 7%. How much must it repay in a lump…

A: Given: The principal amount is = $25,000 Time period = 3 years The interest rate is = 7% To Find:…

Q: You have two investments to choose from. Investment A pays an interest rate of 5% for 2 years and…

A: Future worth is a worth of a venture or resource on a particular date from now on. To put it another…

Q: Equities e. Suppose you are deciding between purchasing the two equities below, both of which are…

Q: If Reybien got a character loan of P10,000 from a bank with 18 percent interest per annum, how much…

A: The principal amount is given which is 10,000. We are required to find out the amount of interest…

Q: Assume that the real interest rate is 10%. A firm can invest in a piece of machinery that will…

A: PV factor in year N = (1.10)N. PDV in year N = Cash flow in year N x PV factor in year N

Q: 1. Calculate the following questions with an interest rate of 11% per year, calculate the following…

A: The present value of money indicates that the amount of money today is more valuable than the same…

Q: Economics What is the interest rate in% that makes the following cash flows (A = B) economically…

A: We are going to calculate present worth for each cash flow. Present worth of Future Cash flows for…

Q: Suppose that the government puts out a tax incentive that encourage people to save more money.…

Q: Which of the following would1 the Qd of LF? Select one: O A. expected profit decreases. B. the real…

A: The loanable funds concept is a market interest rate hypothesis in economics. The interest rate is…

Q: A company is setting up a project to build housing units, and the investment volume is estimated at…

A: * SOLUTION :-

Q: me the interest rate is 7%, What is the present value of $200: 1 year from now? 186.92 5 years from…

A: We need to find the present value of $200So, FV = $200Interest rate, r = 7% = 0.071. The present…

Q: Please try to solve in 20 minute Your client plans to invest $2000 at the end of each year. The rate…

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

Q: 1. Let r, s > 0 be interest rates. Below is a calendar of May 2022 which describes an interest rate…

A: * SOLUTION :- Given that ,

Q: 35. Which of the following is the correct way to compute the future value of $100 put into an…

A: The future value can be given as: F = P (1 + R)t Where: P : Present value F: Future valueR :…

Q: Maintenance on an old machine is $100 this year but is expected to increase by $25 each year…

A: In the present worth analysis, we find the present values of all the cash flows.

Q: What is the present value of receiving $1.10 in the upcoming year, when the annual interest rate is…

A: In economics, the present value(PV) is the value of an anticipated stream of income determined…

Q: As a manager of your company, you are considering to go for a project, with an initial outlay of…

A: As a manager of your company, you are considering to go for a project, with an initial outlay of…

Q: 29. You purchase a $1,000 face-value bond for $800. The coupon is $100 per year, and inflation is 4…

A: As per given information, Investment Amount = $ 800 Return = $ 100 So, Rate…

Q: Suppose that you eam $250 in year 1 and will eam $448 in year 2. If you borrow mòney against your…

A: Given information: Earning in Year 1 = $250Earning in Year 2 = $448 If money is borrowed against…

Q: What is the present value of $500.00 to be paid in two years if the interest rate is 4%? $…

A: Present Value (PV) is given by the formula: PV = FV(1+r)n Given: FV=500, r=0.04, n=2

Q: invest today in order to withdraw ₱ 14,766 annually for6 years if the interest rate is 2.24% if…

A: *Answer: Given information, Annual amount (A): ₱ 14766 Time period (N): 6 years Interest rate…

Q: The Kelowna Go-Kart Klub has decided to build a clubhouse and track five years from now. It must…

A: Write the formula used for calculation as follows: Amount = Amount to be accumulated/ (F/A, I,n)

Question

HOW MUCH MONEY MUST YOU INVEST TODAY IN ORDER TO WITHDRAW P2,000.00 ANNUALLY FOR 10 YEARS IF THE INTEREST RATE IS 9%?

a.P12,385.32

b.P12,835.32

c.P12,881.37

d.P12,853.32

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 by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

What is the simple interest rate applied if an investment of P17,660 accumulates to P23,605 in the period of 6 years? Write your answer in two decimal places.
To secure a return of 4%, at what price should a bond be purchased if it is redeemable at P 1,000 in 10 years and plays annual dividends of P 35,00?
Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the bond is purchased at $500, and can be resold next year for $400. What is the rate of return of the bond? 10% 0% -10% 20%
George wants to retire at 65 with $1,000,000 in savings. He plans to deposit a lump sum on his birthday each year. How much will he need to invest each year if he starts saving at 25? 35? 45? Assume an interest rate of 6%
Find the amount due at the end of 15 months if the present value is PHP 18,000 and if;the simple interest rate is 5%?the discount rate is 5%?
Suppose you expect to receive a $10,000 bonus from your employer in two years upon completing your college degree. If the interest rate is 5%, what is the present value of the $10,000? The present value is $9,070.30 $9,523.80 $11,025.00 $10,500.00
What is the present value of a P90,000 annual annuity for 10 years with an additional P1,000,000 received at the end of the 10th year if the current level of interest rates is 8 per cent? a. P1.9M b. P1.363M c. P1.067M d. P1.167M
An investment promises to pay into an account that pays you 6 percent annually, $150 per month for the next twenty-two years. Suppose the first deposit into the account is made one month from today what is the value of the amount which will be in the account at the end of thirty years? Rounded to 2 decimal places. (Answer up to 2 decimal places)
Susie Lee won a lottery. She will have a choice of receiving $25,000 at the end of each year for the next 30 years, or a lump sum today. If she can earn an annual return of 10 percent on any investment she makes, what is the least she should be willing to accept today as a lump-sum payment? (Round to the nearest hundred dollars.) Use the NPV as you have equal cash flows of $25,000 for the next 30 years.
Suppose you pay $971 for a 10=year Treasury bond that has a face value of $1,000 and a coupon rate of 5%. If you sell the bond one year later for $1,013, what is your one-year rate of return? (Give your answer as a percentage, round your answer to two decimal places; e.g., 4.37 for 4.37%)
Suppose you purchased a corporate bond with a 10-year maturity, a $1,000 par value, a 9% coupon rate ($45 interest payment every six months), and semiannual interest payments. Five years after the bonds were purchased, the going rate of interest on new bonds fell to 6% (or 6% compounded semiannually). What is the current market value (P) of the bond (five years after the purchase)?(a) P = $890(b) p = $1,223(c) P = $1,090(d) p = $1,128
10. Find the amount due at the end of 15 months whose present value is P2,000 at 5% simple discount. ANSWER: 2,133,33