Answered: What is the amount of the lump sum…

Business

Finance

What is the amount of the lump sum assuming the same 4% annual compounding

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 18E

See similar textbooks

Related questions

Q: An investment is offered whereby £1000 is invested immediately, £2000 is invested in exactly…

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

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: You are promised an 8 year streams of income from buying a new technology at the initial amount of…

A: Step 1 Given a certain rate of return, present value (PV) is the current value of a prospective…

Q: 1. Compute the net present value at i=15% per year, compounded annually, for cash flow below: End of…

A: Note : As per the guidelines, only first question will be answered. Kindly post the remaining parts…

Q: Use the present value formula to determine the amount to be invested now, or the present value…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: Find the present value (the amount that should be invested now to accumulate the following amount)…

A: Using excel PV function = PV(rate,nper,pmt,0)

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: At a certain interest rate compounded semiannually, ₱5,000 will amount to ₱20,000 after 10 years.…

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: What is the interest earned on a P100,000 investment if it is held for 20 years at 4.3% simple…

A: Under simple interest, Total interest per year remains the same and there is no concept of interest…

Q: What present value amounts to $25,000 if it is invested for 20 years at 5% compounded annually?…

A: Solution Concept The interest rate compounded annually means the interest is charged on interest and…

Q: A certain project which requires an investment of P 80,000 will produce cash savings after taxes of…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Q: If interest is 7% compounded annually, calculate the present value of four year cash flows of…

A: Net present value is the sum of present value of future cashflows

Q: A company has the following net cash inflows. Today -$7000, Year 1-$15 000, Year 2-$9000, Year 3+…

A: Net present value (NPV) of an alternative/project refers to the variance between the initial…

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: 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: After tax cash flows are 100,000 a year for 5 years. There is no terminal value. The payback period…

A: Initial Investment = cashflow per year × payback period =100000 × 3=…

Q: If you invest 5000 dollars today at a compound interest rate of 10 percent, compounded…

A: Future value can be defined as the worth of money at a future date, computed in accordance with the…

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: In how many years is required for 2,000.00 to increase by 3,000.00 if interest is 12% compounded…

A: The time value of money is the idea that the value of money received today will be more worthy than…

Q: Suppose that money can be invested at 10% compounded annually. a. Accumulate ₱ 5,000 for 10 years ;…

Q: at must be the total present value of the following ? Amount To be received after a) P 20,000 1…

A: Considering a certain return rate, the current value (PV) is the current value of the future cash…

Q: What is the present value, using the present value formula. Achieve $225,500 at 8.65% compounded…

A: The time is 8 years, 155 days. This can also be said as (8 + 155/365)years

Q: Find the present value of the following annuities: 1. 100 at time 1 and increasing by 100 annually…

A: 1. Computation of present value of annuity Year…

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: 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: Assume that investing $ 1,000 entitles you to a ten-year cash flow that yields $ 100 the following…

A: In order to calculate, present value of cash flows, we are required to discount the current value…

Q: is the present value of $10000 to be received 20 years from now, if the principal is invested at 8%…

A: Given, Amount to be received, A = $10,000 No. of years, n = 20 Interest rate , i = 8% or 0.08

Q: A sum of OMR 25600 is invested at an interest rate of 6.25% per year. If the interest is compounded…

A: The time period or the number of years (NPER) refers to the time it would require for the investment…

Q: An amount P20,000 is place in an investment for 10 years. How much is the sum of the investment…

A: Investment (PV) = P20,000 Interest rate (r) = 7% Period (t) = 10 Years e =…

Q: In how many years is required for Php2000 to increase by Php3000 if the interest is at 12%…

A: Time value of money is a financial concept that is used for estimating or determining the value of…

Q: Find the present value (the amount that should be invested now to accumulate the following amount)…

A: Discounting is a technique through which PV of future amount is computed by using appropriate…

Q: You pay off a $200, 000 loan at effective annual interest rate 10% by making interest payments each…

Q: Find the value of X so that the present value of the following cash flow is equal to $70,000.…

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

Q: Find the present value (the amount that should be invested now to accumulate the following amount)…

A: Present Value- In economics and finance, present value (PV), also recognized as present economical…

Q: Accounting Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1 0.926 0.917…

A: Solution:- We know, Net Present Value means the difference between the present value of cash inflows…

Q: What is the present value of a stream of $800 cash payments, each to be made at the beginning of the…

A: Present Value represents the present worth of the investment. This can be computed by using Excel…

Q: What is the future value of a stream of $800 cash receipts, each to be received at the beginning of…

A: Given data; payment amount = $800 interest rate = 10% number of years = 4

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

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: 1. If you invest P10,000 with a rate of interest of 12% compounded annually, compute the interest of…

A: Investment amount (X) = P 10000 Interest rate = 12% Inflation rate = 10% n = 10 years

Q: YEAR 1 - RM 2000 YEAR 2 - RM 7000 YEAR 3 - RM 8000 An investment made today will pay you the…

A: The price o the investment is calculated as the present value of cash flows.

Q: You have been told that you need $25,600 today in order to have $100,000 when you retire 35 years…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: rate of interest, compounded annually, will result in the receipt of $15938.48 if $10000 is invested…

A: The given problem can be solved using RATE function in excel. RATE function computes interest rate…

Q: For the cash flows shown (in $1000 units), calculate the value of x that makes the present worth in…

A: The present value of a cash flow represents the worth of money at present time. It is also known as…

Q: Find the value of X so that the present value of the following cash flow is equal to $70,000.…

A: Present value is one of the most important concepts and techniques of the time value of money and…

Question

A company wants to deposit a lump sum now that will give the same future value in 20 years as 20 year-end payments of $2000 invested at 4% compounded annually. What is the amount of the lump sum assuming the same 4% annual compounding

Video Video

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

Step 2

Step 3

Step 4

Step by step

Solved in 4 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

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
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%
Jullo Company is considering the purchase of a new bubble packaging machine. If the machine will provide $20,000 annual savings for 10 years and can be sold for $50,000 at the end of the period, what is the present value of the machine investment at a 9% interest rate with savings realized at year end?
Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?
Compute the amount that a company must invest (the present value) at 10% compounded annually if it wants to have $100,000 available (the future value) in 25 years.