Answered: sum of money amounts to 9800 after 5…

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

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 1P

See similar textbooks

Related questions

Q: The differences between simple interest and compound interest on a sum for 3 years at 5% per annum…

A: Future value under compound interest: Future value =Amount*(1+rate)^years Future value = Amount…

Q: 1. How much is the compound interest on P12,500 at 6% for 8 years? 2. How much will P15,000 amount…

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

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: what is the nominal rate of interest compounded continuously for 8 years if the present worth factor…

A: Continuous Compounding N = 8 Present Value factor = 1.7506725

Q: 1. At a certain interest rate compounded semi-annually, P5,000 will amount to P20,000 after 10…

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

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 a sum of $5000 is deposited now, $7500 is deposited 3 years from now, And $2000 per year in years…

A: A study that proves that the future worth of the money is lower than its current value due to…

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: Mr. O got a 5 year, 100,000 dollars balloon commercial loan. The annual interest rate is 6% and the…

A: Loan amount (L) = $100000 r = 6% per annum = 0.5% per month n = 30 years = 360 months Let X =…

Q: A MAN PAYS HIS DEBT IN THE FOLLOWING MANNER: P1,000 AFTER 1 YEAR, P900 AFTER 2 YEARS, P800 AFTER 3…

A: Payment after year 1 = P 1000 Payment after year 2 = P 900 Payment after year 3 = P 800 Payment…

Q: WHAT IS THE ACCUMULATED AMOUNT OF THE FIVE-YEAR ANNUITY PAYING P6,000.00 AT THE END OF EACH YEAR,…

A: Annuity is a stream of cashflows which may be constant, growing, increasing, declining or…

Q: At what rate of compound interest per anum 5 years will 2000 amount will be 2550

A: Compound interest is a method of calculating interest on a principal amount. It not only calculates…

Q: Consider the cash flows given above. What is the equivalent annual payment for 5-year annuity at 5%…

A: Annuity payment can be calculated by equating the present value of annuity with the present value of…

Q: etermine the simple interest. The rate is an annual rate. Assume 360 days in a year. p=$280,…

A: Simple interest is the type of interest that is calculated on the original amount invested in an…

Q: Calculate the total amount accumulated at the end of the 10 years if the payments are at the end of…

A: In order to calculate the accumulated amount after 10 year, we will be using the FV function of…

Q: Can you please show me how we get the number, 1.242381 In this sum , A = $ 2,500 P = ? Time =…

A: Below is the extended calculation for better understanding: A=P×…

Q: The following table is for the present value of $1 at compound interest. Year 6% 10% 12%…

A: Calculate the present value of cash flows.

Q: What is the accumulated value of P50,000 for 5 years and 3 months at 6.5% simple interest?

A: We need to use the formula of simple interest to determine the interest amount. Then, we need to add…

Q: A sum of 12,500 amounts to 15,500 in 4 years at the rate of simple interest. What is the rate of…

A: Simple interest is defined as an interest type, which is an easy method for the calculation of an…

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: 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: P7500 is deposited in a savings account at a 6.5% rate of interest compounded quarterly for 25…

A: Future Value: = Principal×(1+r)nt Where, Principal = P7500 r = Quarterly rate = 6.5% ÷ 4 quarters…

Q: Some amount out of P7000.00 was lent at 6% per annum and the remaining at 4% per annum. If the total…

A: The total simple interest earned is the sum of interest earned on two different deposits.

Q: A man bought an eqpt costing P500k payable in 20 semi annual payments with i = 12% , determine each…

A: Calculate the periodic payment using the present value of annuity. For payment made after 1 year the…

Q: eries of equal semi-annual payments of $1,000 for 3 years is equivalent to what present amount at an…

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

Q: What is the present worth of each given series of payments?(a) $12,000 at the end of each year for…

A: a) Hence, the present worth is $15315.38. b) Hence, the present worth is $45327.06.

Q: The present value of $66,000 to be received in two years, at 12% compounded annually, is needed.…

A: We will use the concept of time value of money here. As per the concept of time value of money the…

Q: what amount will accumulate if we deposit 8500 at the beginning of each year for the next 10 years…

A: Solution Given Deposit at the beginning of each year 8500 Number of period 10 years…

Q: Consider these two annuities. Annuity 1: $150 invested at the end of each 6 months for 20 years at…

A: As we are dealing investment accounts with periodic deposits, we will use annuity formula. Here we…

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: (a) A sum of $2000 is deposited in a time-deposit account that pays interest at a rate of 3% per…

A: Here we will use the concept of time value of money. As per the concept of time value of money the…

Q: Find the present value of an annuity of P20,000 payable annually for 8 years, with the first payment…

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

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: What is the present value of receiving $2,500 at the end of each year for 5 years, assuming 7%…

A: As it is the case of annuity due, thus, the first table will be used @7%, 5 years.

Q: Money is worth 8% compounded annually. For a uniform series of payments, what would be its compound…

A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…

Q: What are the present worth and the accumulated amount of a 10 year annuity paying P10,000 at the end…

A: In this we need to calculate the present value of annuity.

Q: What's the present value of $12,000 discounted 5 years if the appropriate interest rate is 4.5%,…

A: The value today can be calculated with the help of present value function

Q: Given below are the future value factors for 1 at 11% for one to five periods. Interest is…

A: Option b is correct.

Q: A sum of $ 2,000 is spent today, $ 500 is spent at the end of each year for 6 years, $ 800 is also…

A: Future Value for annual instalments is calculated by the future value of annuity formula. Future…

Q: Use the compound interest formula to compute the total amount accumulated and the interest earned.…

A: Time value tells that the money received today has more worth than that of receiving an identical…

Q: If the interest rate is at 8%, what is the maximum amount that can be loaned given a repaid of :…

A: Maximum amount that can be loaned is the total sum of present value of all repayment.

Q: In how many years is required for $2000 to increase by $3000 if interest is 12% compounded semi…

A: Compound interest (also known as compounding interest) is interest calculated on a loan or deposit…

Q: What's the present value of $14,000 discounted back 5 years if the appropriate interest rate is…

A: Future Value = 14,000 Semi Annual Compounding Time Period (N) = 10 semi annual periods Interest Rate…

Q: suppose that $2700 is set aside each year and invested in a savings account that pays 8% interest…

A: Annual saving (A) = $2700 r = 8% compounded continuously n = 25 years

Q: a) What would be the accumulated value of ₺ 100.000 in a saving account at 8% per year for 5 years…

A: Amount = 100000 Interest Rate = 8% Years = 5 for compound interest rate Years = 9 for simple…

Q: 1. A man deposited P25,000 in a bank with interest at 8% compounded monthly for 3 years. After 3…

A: Introduction Note: “Since you have asked multiple questions, I will solve the first question for…

Q: Compare the interest earned by $10,000 for five years at 10% simple interest with that earned by the…

A: When an accrued amount is calculated, which includes principal plus interest, it is known as simple…

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

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 :

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

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, accounting and related others by exploring similar questions and additional content below.

Similar questions

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
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?
A sum of 12,500 amounts to 15,500 in 4 years at the rate of simple interest. What is the rate of interest?
1000 dollars is deposited into an account at the beginning of the year and the value at the end of five years is 1276.30. (a) If the account was subject to a force of interest δ(t) = kt where t is in years, k =? (b) If inflation is 1 percent a year, what is the adjusted effective yearly interest rate?
Don’s investment amounts to ₱9,800 after 5 years and ₱12,005 after 8 years at the same rate of simple interest. The rate of interest per annum is:
What is the present worth of the followingseries of payments?(a) $1,500 at the end of each year for 10 years at7.25% compounded annually.(b) $4,900 at the end of each year for seven years at9.75% compounded annually.(c) $1,000 at the end of each year for 15 years at8.2% compounded annually.(d) $19,500 at the end of each year for eight years at7.5% compounded annually
What is the present worth in year 0 of a uniform series of payments of $1,000 in years 2 thru 5 and another series of $2,000 payments in years 8 thru 12 at an interest rate of 12% per year?
The present value of $75,000 to be received in two years, at 12% compounded annually, is _____ (rounded to nearest dollar). Use the following table, if needed. Present Value of $1 at Compound Interest Periods 5% 6% 7% 10% 12% 1 0.95238 0.94340 0.93458 0.90909 0.89286 2 0.90703 0.89000 0.87344 0.82645 0.79719 3 0.86384 0.83962 0.81630 0.75132 0.71178 4 0.82270 0.79209 0.76290 0.68301 0.63552 5 0.78353 0.74726 0.71299 0.62092 0.56743 6 0.74622 0.70496 0.66634 0.56447 0.50663 7 0.71068 0.66506 0.62275 0.51316 0.45235 8 0.67684 0.62741 0.58201 0.46651 0.40388 9 0.64461 0.59190 0.54393 0.42410 0.36061 10 0.61391 0.55840 0.50835 0.38554 0.32197
A payment of $1,750 is due in 2 years, and $5,800 is due in 5 years. What single payment made today would be equivalent to these original payments? Assume that money earns 4.25% compounded semi-annually.
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
A certain amount is invested 5 years and 6 months ago at an interest rate of 8% compounded semi - annually. The accrued amount now is P 347,054. How much was the amount invested?
1.If money is worth 5% compounded semi annually, find the present value of a sequence of 12 semi annual payments of P450 each, the first of which is due at the end of 4 1/2 years? 2.If money is worth 5% compounded quarterly , find the future worth of a sequence of 12 semi annual payments of P1200 each, the first of which is due at the end of 4 1/2 years?