Attach a complete solution. Draw the cash flow diagram.Suppose that P 4500 is deposited each year into a bank account that pays 8% interest compounded quarterly. How much would be accumulated in his fund by the end of the 4th year? The first payment occurs at time zero (now). 3. Attach a complete solution. Draw the cash flow diagram.Suppose that P 4500 is deposited each year into a bank account that pays8% interest compounded quarterly. How much would be accumulated inhis fund by the end of the 4th year? The first payment occurs at time zero(now).

The deposits are made into account but these deposits grow with an interest rate that is compounding…

Suppose that P 4500 is deposited each year into a bank account that pays 8% interest compounded quarterly. How much would be accumulated in his fund by the end of the 4th year? The first payment occurs at time zero

Suppose that P 4500 is deposited each year into a bank account that pays 8% interest compounded quarterly. How much would be accumulated in his fund by the end of the 4th year? The first payment occurs at time zero

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 34P

See similar textbooks

Related questions

Q: Please answer items 9 to 10

A: As asked in the question we will solve only question 9 and question10. We should apply the formula t...

Q: Bryce and David plan to purchase a home for $176,000. They will pay 20% down and finance the remaind...

A: Down payment = 20% Loan (L) = 80% of $176000 = $140800 n = 15 years = 180 months r = 8.2% per annum ...

Q: Compare the entrepreneurs in the past and today. How are they different each other based on the entr...

A: Entrepreneurship is defined as the capacity and willingness to create, organize, and run a firm, inc...

Q: Bridgette Inc. has forecasted that its net income will be P400,000. The company has debt ratio of 30...

A: Given Information : Net Income = P400,000 Debt ratio = 30%Project Investment = P500,000 Number of sh...

Q: culate the required rate of return for Campbell Corp. common stock. The stock has a beta of 1.3, and...

A: The minimum profit (return) that an investor must seek or obtain in exchange for taking on the risk ...

Q: How are conflicts between the shareholders and the management created? Which of the following is mos...

A: Conflicts between the shareholders and the management majorly arise due to the differences in measur...

Q: Find the present value for a $2,600 payment paid semi annually for fifteen years if interest pay 5.1...

A: Time value of money (TVM) is used to measure the value of money at different point of time in the fu...

Q: John and Jane have been saving to pay for their daughter Macy's college education. Macy just turned ...

A: Given Tuition cost = $20000

Q: A proposed relaxation of credit standards of Bulldogs Inc. will increase the balance of accounts rec...

A: Solution:- Average collection period means the average days to recover money from debtors. We know, ...

Q: (Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase o...

A: Investment amount = $90,000 Annual cash inflow = $17,000 Period = 9 Years

Q: 1. On July 15, 1996, what will John receive on selling note to Ben to whom money is worth 4% compoun...

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

Q: An IOU agreement was made between two persons. For a face value of $100,000, it was agreed that the ...

A: Face value = $100000 Annual payment (A) = 10.50% of Face value = $10500 Redemption value (R) = 90% o...

Q: Use the following information for exercise 15 to 18 LO P2 [The folowing information apples to the qu...

A: Given: Revenue = $12,820 Rent expenses = $2,530 Salaries expenses = $5,780 Telephone expenses = $790...

Q: Bulldogs Inc. expects earnings before interest and taxes of P2,500,000 for the coming year. The firm...

A: With the help of the given figures we will prepare the below table for finding out the Dividend.

Q: On January 1, 2018, Kline Inc. borrowed P9,000 from Harvard Co., and on January 1, 2020, it borrowed...

A: First, we will calculate the amount of the first payment after taking it as a base we can calculate ...

Q: Dufner Co. issued 14-year bonds one year ago at a coupon rate of 6.4 percent. The bonds make semiann...

A: Par value (FV) = $1000 Coupon rate = 6.4% Semi annual coupon amount (C) = 1000*0.064/2 = $32 Years t...

Q: Allen Inc. took out a 1-year, 8%, $100,000 loan on March 31, 2018. Interest is due upon maturity of ...

A: Solution:- When an amount is borrowed, the lender charges interest on it and at the maturity, princi...

Q: Why this Strategic, Tactical and Operational decision classification more relevant than classic clas...

A: We know that a manager has to take various decision in achieving the goal set the by management. Her...

Q: Bulldogs Inc. wants to analyze its variances in its actual and budgeted operation. · There is...

A: Given, Actual gross profit = Budgeted gross profit. Quantity of units sold = Budgeted units sold. A...

Q: Discuss the importance of the role of a wealth manager professional in the context of protecting the...

A: Financial planning, investment portfolio management, and a number of aggregated financial services a...

Q: Jenna made equal deposits at the beginning of every 3 months into an RRSP. At the end of 6 years, th...

A: Quarterly deposit = P Future value (FV) = $55,000 Interest rate = 3.50% Quarterly interest rate (r)...

Q: In 2012 TabaSue had a $500 savings bond that had reached maturity and she invested $5,500 in a savin...

A: Interest rate on investment = 5.4% A(t) = 500 + 5500(1.054)^t where t = Years after 2012

Q: Incremental Analysis A1 A2 -$1,000 -$5,000 1 $2,000 $7,000 IRR 100% 40% PW(10%) $818 $1,364 R-122 (R...

A: Since you have posted a multiple question therefore, we will be solving the first question only. How...

Q: You are constructing a simple portfolio using two stocks A and B. Both have the same expected return...

Q: What do entrepreneurs do that distinguishes them from any other person involved in the business?

A: A business is an enterprise entity or an organisation which is present to carry out a variety of act...

Q: Urgently need

A: Price of Bond refers to the is the present discounted value of future stream of cash flows. In other...

Q: Explain the problems posed for the use of the IRR when it is necessary

A: Internal Rate of Return: It is a discount rate that makes the projects/investments' net present val...

Q: Bulldogs Inc. deals with various clients throughout the city and is attempting to collect its accoun...

A: A lockbox is a bank-operated mailing address to which a business directs its clients' payments. The ...

Q: ind the future values of the following ordinary annuities.

A: Future Value of Ordinary Annuity: It refers to the future worth of the annuity cash flows made at t...

Q: The company’s usage of the Baumol model in cash management involves trade-off. A decrease in the opt...

A: Cash, according to William J. Baumol (1952), may be maintained in the same way as any other inventor...

Q: A contract calls for a payment of P 1,200 at the beginning of each month for 12 months. At what rate...

A: Compound interest is interest calculated on the deposit or loan's original principal with any accum...

Q: Barry has applied for a loan in the amount of $10,500. A bank figures that Barry will repay the loan...

A: Loan amount = $10500 Probability of repayment = 0.93 Probability of default = 0.07 Let the interest ...

Q: Bulldogs Inc. expects earnings before interest and taxes of P2,500,000 for the coming year. The fir...

A: Tax rate is 25% To Find: Dividend payout ratio

Q: 0.mm MADE IN PR You are given the future value of an annuity, A, the monthly payment, R, and the ann...

A: Since the question above the line is incomplete, so the following solution is for the question below...

Q: .The time period between the date a note is discounted and the maturity date is called the _____ per...

A: Discount rate is the rate of interest that is charged for buying a note by the financial institution...

Q: Compute for the: 1.) Call Option - Total Value 2.) Call Option - Intrinsic Value 3.) Call Option ...

A: The question is based on the concept of valuation of an option contract. Total value is the market ...

Q: The Hershey Company is planning on releasing a new line of gluten-free candy products. New equipment...

A: Tax rate is 21% To Find: Incremental cash flow in year-2

Q: Bulldogs Inc. loaned a certain amount from a reputable bank for a term of one year at 8% quoted rate...

A: Compensating loan is a provision that the bank asks the loan taker to maintain as a security when th...

Q: A father wants to set aside money for his 5-year old son's future college education. Money can be de...

A: Present Value The present value is the value of cash flow stream or the fixed lump sum amount at ti...

Q: The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1,000...

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first ...

Q: The annual returns of a stock and the risk-free interest rate are given as follows: Year 2010 2011 2...

A: The annual returns of a stock and the risk-free interest rate are given as follows: Year = 2010 2011...

Q: On April 1, S10,000.00 364-day treasury bills were auctioned off to yield 2.31%. (a) What is the pri...

A: Hi, since you have posted a question with multiple sub-parts, we will answer the first three as per ...

Q: On January 1,2020, Cookie Company leased an equipment from Sydney Company for 8 years with annual le...

A: The lease is recorded at the present value of the minimum lease payment. Interest expense is calcula...

Q: NEKO Inc. has forecasted that its net income will be P400,000. The company has debt ratio of 30%. Th...

A: Net income (NI) = P400,000 Debt ratio = 30% Equity ratio (ER) = 100%-30% = 70% Investment requiremen...

Q: Repay Principal and Interest on a $1000 mortgage. Annual Term of Mortgage (years) rate () (r) 10 15 ...

A: The mortgages are paid by the monthly payment that are paid by that carry the payment for interest a...

Q: Why do short-term debt securities issued by private companies generally offer higher yields than tre...

A: Short term debt securities are referred as the securities, which are issued within 12 months to the ...

Q: he following are methods of acquiring funds through long-term financing, except a. Issuing a note t...

A: Solution:- Long term financing means acquiring funds for a long period of time, generally more than ...

Q: Suppose that you earn $39,600 per year. What is your monthly salary? 3300 Assume that you deposit 10...

A: Monthly salary = $39600 / 12 = $3300 Monthly deposit (D) = 10% of $3300 = $330 r = 4.3% per annum = ...

Q: he residual theory of dividends argues that dividends a. can only be distributed if there is income...

A: Solution:- Residual theory of dividends means the dividend is the residue left after meeting the cap...

Q: A new electric saw for cutting small pieces of lumber in a furniture manufacturing plant has a cost ...

A: Cost = $4000 n = 10 years Salvage value = 0

Question

Attach a complete solution. Draw the cash flow diagram.

Suppose that P 4500 is deposited each year into a bank account that pays 8% interest compounded quarterly. How much would be accumulated in his fund by the end of the 4th year? The first payment occurs at time zero (now).

3. Attach a complete solution. Draw the cash flow diagram.
Suppose that P 4500 is deposited each year into a bank account that pays
8% interest compounded quarterly. How much would be accumulated in
his fund by the end of the 4th year? The first payment occurs at time zero
(now).

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

Knowledge Booster

Money Management and Achieving Financial Goals

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

You put $250 in the bank for S years at 12%. 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 fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The discount factor for year 1 is 0.89 and for year 2 is 0.80. The NPV is a. 0 b. 6,800 c. 1,400 d. (4,000)
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.
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?
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
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?