What is the effective annual rate (EAR) if the stated rate is 8 percent and compounding occurs semiannually? Quarterly?     a.      The future value of $500 invested at 8 percent for one year     b.     The future value of $500 invested at 8 percent for five years   c.      The present value of $500 to be received in one year when the opportunity cost rate is 8 percent     d.     The present value of $500 to be received in five years when the opportunity cost rate is 8 percent

Q: What is the effective annual rate (EAR) if the stated rate is 8 percent and compounding occurs…

A: In this question we need to calculate the effective annual rate (EAR).

Q: Compute the simple interest INT for the specified length of time and the future value FV at the end…

A:

Q: What is the present value of a stream of monthly payments of $500 each over 10 years, if the…

A: Monthly payment (P) = $500 Interest rate = 10% Monthly interest rate (r) = 10%/12 =…

Q: What is the future value of $550 invested for 5 years at 15 percent compounded annually?

A: Following details are given in the question: Present value (Investment today) = $550 Time period = 5…

Q: Consider the case where the Annual Percentage Rate (APR) is 15%. If the frequency of compounding is…

A: Annual Percentage rate = 15% Compounding = Quarterly Number of compounding per year = 4

Q: A series of year end payment extending over ten years are as follows 5000 for the first year 10000…

A: N = 10 Payments: Year Payment 1 5000.00 2 10000.00 3 20000.00 4 20000.00 Interest rate…

Q: Find the future value of the given amount. Round the result to the nearest cent. $1200 at 5%,…

A: In finance, the effective interest rate shows the actual amount of interest to be paid or received…

Q: Find the future value if $2700 is invested for 7 years at an annual rate of 9% compounded quarterly.

A: If the money deposited in the account is left untouched it will end up growing into a larger balance…

Q: What annual rate of return is earned on a $1,000 investment when it grows to $2,700 in eight years?…

A: Return can be calculated as: Return = Closing Value - Opening ValueOpening Value Substituting the…

Q: What would be the future value of $7,992 invested annually for nine years beginning one year from…

A: future value formula: future value =A×1+rn-1r where, A=annuity r=rate of interest n=number of years

Q: At what per annum rate must $232 be compounded monthly for it to grow to $617 in 10 years?

A: EXCEL FORMULA:

Q: A firm wishes to set aside equal amounta at the end of each of 10 years beginning at the end of the…

A: Calculation of Present value of maintenance funds  Pvf @ 6% = 1 / (1+rate)^period   Present value =…

Q: If 39600 dollars is invested at an interest rate of 9 percent per year, find the value of the…

A: Given: PV (Present Value ) =$39600Interest rate(i) =9% per yearNo. of years (n) =5 Abbreviation:FV…

Q: PLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULAS Problem 1 Find the final value (FV or…

A: Future Value(FV) or Final Value is the worth of current invested amount after certain period of…

Q: What is the future value of $200 received today and deposited at 8 percent compounded semi annually…

A: Formulas: Future value = Amount *(1+rate)^years

Q: An investment required an initial payment of $10,000 and annual payments of $1,500 at the end of…

A: First we need to calculate present value of total outflows PV of outflows =initial payment +PMT…

Q: What is the present value of annual payments of $2,000 for 12 years at 1 percent?

A: Present Value of Annuity is that amount which was invested by the investor today for receiving the…

Q: Find the time required for an investment of 5000 dollars to grow to 8700 dollars at an interest rate…

A: The time can be computed using excel as follows:

Q: 4-15 If the opportunity cost rate is 7.5 percent, what is the present value of an investment that…

A: Hi, since there are multiple questions posted, I will answer the first one as per the guidelines.…

Q: What is the present value of $2,450 to be received in five (5) years if the opportunity cost rate is…

A: The provided information are: Future value (FV) = $2450 Number of years (n) = 5 Rate (r) = 9 Rate is…

Q: Find the following values for a lump sum assuming annual compounding: The future value of $500…

A: Before we get into the solution, let's understand two reciprocal concepts:If present value (PV) is…

Q: Solve for the future value of $1,300 after 1 year invested at 4 percent if compounding is a) annual.…

A: Future value is the value of present investment in the future after compounding the present…

Q: The future value of $500 to be received at the end of each year for seven years at adiscount rate of…

A: Computation of future value:Therefore, the future value is $4,461.40.

Q: What is the present value of $1,552.90 due in 10 years at (1) a 12 percent discount rate and (2) a 6…

A: Compute present value of $1,552.90 due in 10 years at 12% discount rate as shown below:

Q: $13,000 is invested at 4.5% for 20 years, find the future value if the interest is compounded the…

A: In this we have to find out future value using formula.

Q: Calculate the future value (FV) in 6 years time of £600 invested at 12% nominal annual interest, if…

A: Future value is the compounded value of a present sum of money compounded at a given interest rate…

Q: What is the future value of $5,000 deposited for four years compounded atan annual rate of 10…

A: Annual Compounding       Interest rate  10.00%   Period (NPER)  4   Present Value 5000…

Q: What is the equal-payment series for 10 years that is equivalent to a payment series starting with…

A: Given information: Initial amount is $10,000 Decreases by $1,000 over 10 years Interest rate is 7%

Q: What is the future value of $1,200 in 20 years at an APR of 8.00 percent compounded semiannually?

A: The amount can be calculated with the help of future value function

Q: At an effective annual interest rate i, the present value of S10 per year, payable at the beginning…

A: In finance, the time value of money rule states that the sum of money today has more purchasing…

Q: what is the average EAR on an investment that earns 6% APR with monthly compounding for 5 years,…

A: The EAR is calculated for the compounded interest which shows the single rate that will provide same…

Q: What interest will be earned if $6500 is invested for 7 years at 10% compounded monthly? (Round your…

A: Compound interest is a method of calculating the interest to be paid for using the money lent in a…

Q: 1. Calculate the present value of $8,000 receive five years from today if your investment pay a. 6…

A: Using excel PV function

Q: What is the present value of $1,552.90 due in 10 years at (1) a 12 percent discount rate and (2) a 6…

A: 1 2 FUTURE VALUE 1552.9 1552.9 DISCOUNT RATE 12% 6% YEARS 10 10 PMT 0 0   ANNUALLY…

Q: Find the future value in five years of an investment of $103,000 made today that earns 5.50 percent…

A: Future value is the expected value of the current sum at a future date.

Q: What is the principal that will grow to $2600 in four years, one month at 4 5% compounded annualy?…

A: present value formula: present value =future value1+rnwhere,r=rate of interestn = number of years

Q: For total yearly payments of $10000 for 10 years, compare the compound amount accumulated at the end…

A: An ordinary annuity is a series of equal payments made over a period of time.  It has been…

Q: Fill in the table below when P= $9,000, S= $3,000 (at the end of four years), and i 12% per year.…

A: Here, P or Investment is $9,000 S or Salvage Value is $3,000  Time Period is 4 years MARR or i is…

Q: what is the present value of $800 to be received at the end of eight years assuming an interest rate…

A: The present value of the cash flow is the current worth of a cash flow at a certain rate of interest…

Q: At an interest rate of 10% per year, the perpetual equivalent annual cost of $70,000 now, $100,000…

A: Perpetual equivalent annual cost in simple words is an annual cost of one period considering the…

Q: What is the equal payment series for 8 years that is equivalent to a payment series of $15,000 at…

A: Given information:  Payment series: $15,000 Increasing amount: $1,500 Period: 10 years Interest…

Q: Find the present value of the following annuities 800 starting at time 1, decreasing by 50 annually…

A: Annuity is a series of regular payments being made for a specified period. When the payments are at…

Q: Determine how much is in each account on the basis of the indicated compounding after the specified…

A: As per the guidelines we are allowed to solve the first three parts only The account value can be…

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.