interest dues on it. Three years from this withdrawal you start taking Php 20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was each withdrawals?

interest dues on it. Three years from this withdrawal you start taking Php 20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was each withdrawals?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 24P

See similar textbooks

Related questions

Q: Suppose that a woman deposits $10,000 into an investment fund that guarantees to pay 0.5% interest…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: A young man has decided to go into the business at the age of 25, he deposits a certain amount and…

A: N = Number of deposits = 11 Annual Increase in deposit = 50,000 Future Value Required = 30,000,000…

Q: A loan of $50,000 is due 10 years from today. The borrower wants to make monthly payments at the end…

A: The payments made constantly without any uneven time gap are called annuity where nominal amount for…

Q: Ali is making $1,000 monthly deposits into a fund that pays interest at a rate of 6% compounded…

A: Given: Monthly deposit = $1,000 Interest rate = 6% Years = 10

Q: Suppose you have an opportunity to invest in a fund that pays 12% interest compounded annually.…

A: Given: workings:

Q: Clearlake Optical has a $50,000 note that comes due in 6 years. The owners wish to create a sinking…

A: Future Value = $50,000 Time period = 6 Years Interest rate = 3.5%

Q: What annual deposit into a sinking fund at 5% compounded annually will be needed to raise half a…

A: P500000 is needed at the end of 10 years. The Fair value at the end of 10 years = Annual Deposit x…

Q: A corporation decides to deposit a fixed payment per quarter into an account earning 4% interest per…

A: Amount needed at the end of year 7 121000 Period 7 years No of period (Quarterly) 28 Rate of…

Q: A small business owner deposits $5000 monthly deposits in an equity fund as his financial analysis…

A: future value of annuity formula: Future value =A×1+rmm×n-1rmwhere,A=annuityr=rate of…

Q: Determine the value of n and t in each problem below. In the coming three years, you will need Php…

A: solution Given for first question Future value needed 200000 Present value ?…

Q: Clearlake Optical has a $50,000 note that comes due in 5 years. The owners wish to create a sinking…

A: In this question, we need to compute the semiannual deposit amount in the sinking fund. A sinking…

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: Calculation of effective annual rate (EAR): Answer: Effective annual rate (EAR) is 8.16%

Q: A local Dunkin’ Donuts franchise must buy a new piece of equipment in 4 years that will cost…

A: Future value required (FV) = $81000 Interest rate = 16% Quarterly interest rate (r) = 16%/4 = 4%…

Q: Fifteen years ago deposited 12500 in to an investment fund.five years ago you added an additional…

A: a) Computation:

Q: A consultant advises that a fund pays out $100,000 at the end of 5 years. Provided $12,000 is…

A: Annuity due are those payments that are made at the beginning of the year and ordinary annuities are…

Q: A contractor would like to invest in a real- estate development project and expecting to get $20,000…

A: Compounding interest rate is the rate applied on the initial amount invested or borrowed and the…

Q: You have been hired to run a pension fund for TelDet Inc, a small manufacturing firm. The firm…

A: Calculate the value in 10 years as follows: a. value in 10 years = Future value of 5 year cash…

Q: A local retail franchise must buy a new piece of equipment in 6 years that will cost $89,000. The…

A: Payment per period can be calculated using PMT function in excel. PMT(rate, nper, pv, [fv],…

Q: A business sets up a sinking fund so they will have a $49,000.00 to pay for a replacement piece of…

A: The PMT function or concept can be used to determine the periodic payments required to accumulate a…

Q: you started making sinking fund deposit of 20000 today. its bank pays 6% compounded semi-annually…

A: Solution Given Present deposit 20000 Rate of interest 6% compounded semiannually…

Q: A corporation creates a sinking fund in order to have $520,000 to replace some machinery in 11…

A: A sinking fund is created to replace an existing machine. Future value of the sinking fund (FV) =…

Q: Clearlake Optical has a $50,000 note that comes due in 6 years. The owners wish to create a sinking…

A: Given Information Interest rate = 2.5% compounded semi-annually Time Period = 6 years Accumulated…

Q: Twelve years ago, you deposited $25,500 into an investment fund. Five years ago, you added an…

A: Given information: Deposited an amount of $25,500 for 12 years Additional $15,000 added into…

Q: Clearlake Optical has a $50,000 note that comes due in 6 years. The owners wish to create a sinking…

A: Sinking fund is a fund where individuals set a side certain sum of money on a regular basis for…

Q: You deposit 20,000 today into a fund paying (i)=8%. From this fund, you receive 10 payments of R,…

A: Computation of R:

Q: A business sets up a sinking fund so they will have a $46,000.00 to pay for a replacement piece of…

A: A Sinking fund refers to a fund that is kept aside or borrowed for the purpose of paying off a debt…

Q: On January 1, 2005, a person’s savings account was worth $200,000. Every month thereafter, this…

A: Here, Worth of Saving Account on January 1, 2005 (PV) is $200,000 Cash Contribution Every month…

Q: A group of employees decided to invest a portion of their 13th-month pay. After 3 months from today,…

A: Here, Withdrawal Amount is P5,000 Time Period is 12 months Interest Rate (r) is 5% Compounding…

Q: Mrs. Enriquez would like to invest 150,000 pesos for 10 years. She went to four known banks and…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: Clearlake Optical has a $50,000 note that comes due in 3 years. The owners wish to create a sinking…

A: Given: Annual rate (r)=1.5%=0.015 Future value (A)= $50,000 Number of years (t)=4 Number of payments…

Q: A business must raise $50,000 in 9 years. What should be the size of the owners' quarterly payment…

A: A sinking fund is a fund that contains money or funds set aside for paying obligations or debt or…

Q: A group of college students decided to invest the money they earned from the fund-raising project.…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Matthew invested the profit of his business in an investment fund that was earning 3.75% compounded…

A: Data given: APR( monthly) = 3.75% Semi-annual withdrawal = $ 2500 No.of years to first withdrawal =…

Q: ma'am minda started to deposit P2,000 quarterly in a func that pays 5.5% compounded quarterly. How…

A: Quarterly Deposit = 2000 Interest rate = 5.5℅/4 = 1.375℅ per quarter N = 24 quarters

Q: Today, you invest P100,000 into a fund that pays 25% interest compounded annually. Three years…

A: Compound interest formula : Final amount = Principal (1+interest rate/number of compounding…

Q: You deposit $1,000 in a fund at the end of each year for a 10- year period. The fund pays 5%…

A: An amortization schedule is a complete table of periodic loan payments, showing the amount of…

Q: A corporation creates a sinking fund in order to have $790,000 to replace some machinery in 11…

A: A fund that is created to repay a debt or replacement of an asset by putting an equal sum of amount…

Q: Suppose you plan to buy the Blacklist Company by investing Php 5,000 every year to an investment…

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

Q: A company estimates that it will need $66,000 in 10 years to replace a computer. If it establishes a…

A: We need to use the following formula to calculate the amount for sinking fund CF=FVn(1+r)n -1r Where…

Q: You just placed $3000 in a fund expected to earn 12% APR compounded monthly. At that rate, how many…

A: Amount placed now(PV) is $3000 Interest rate Compounded monthly is 12% Monthly interest rate is…

Q: A consultant advises that a fund pays out $100,000 at the end of 5 years. Provided $12,000 is…

A: $100000 is the future value of annuity due, with $12000 (A) as the annual deposit. n = 5 years Let r…

Q: You are on employee that earn Php. 20,000 per month. Assuming that you want to invest half of the…

A: Monthly earning = Php. 20,000 Monthly investment (P) = 20,000/2 = Php. 10,000 Interest rate = 6%…

Q: 1. Mark started to deposit P18,000 semi-annually in a fund that pays 5% compounded semi-annually.…

Q: A small company wishes to set up a fund that can be used for technology purchases over the next 6…

A: A company wants to purchases technology over 6 years. For this, the amount which is required to…

Q: I want to accumulate %500,000 in a savings account in 20 years. If the bank pays 6% compounded…

A: For above question, we have to calculate principle amount or present value of amount to be invested…

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: Compounding interest rates are a concept of interest on interest where interest is reinvested rather…

Question

Today, you invested Php 100,000 into a fund that pays 25% compounded annually. Three years later, you borrow Php 50,000 from a bank at 20% annual interest and invested it in the fund. two years later, you withdraw enough money from the fund to repay the bank loan and all interest dues on it. Three years from this withdrawal you start taking Php 20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was each withdrawals?

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

SEE SOLUTION Check out a sample Q&A here

Similar questions

If 90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of 23,138.32 are made starting on December 31, 2020, that will deplete the fund, what is the interest rate being earned if interest is compounded annually?
Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
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?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
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
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.
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?