Answered: What is the value in year 5 of a $740…

What is the value in year 5 of a $740 cash flow made in year 7 if interest rates are 9 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...

See similar textbooks

Related questions

Q: Use the following time value of money tables for Questions 1-4. Round answers to the nearest dollar.…

A: Solution: Amount deposited to saving account = $3,000 Interest rate = 6% Period = 3 Years

Q: If the nominal interest rate is 3%, how much is $5000 worth in 10 years in a continuously compounded…

A: The account value in 10 years is computed using the Future Value formula with continuous…

Q: What is the future value of 15 deposits of $2,330 each made at the beginning of each period and…

A: The question is based on the concept of Financial accounting.

Q: What is present value of the cash flow at the end of years 1 the cash flow is $1000 and $2000at the…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: P5-4 Future values For each of the cases shown in the following table, calculate the future value of…

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

Q: Find the PW, AW and FW of the following cashflow if the interest rate compound semiannually. P-7…

A: The question is based on the concept for calculating Present worth(PW), Annual Worth (AW), and…

Q: What is the future value of 12 periodic payments of $1,000 each made at the beginning of each period…

A: Future value is the expected value of the current sum in a future date at a given rate of interest.…

Q: What is the amount C of quarterly deposits such that you will be able to withdraw the amounts shown…

A: Given Information: Period Cash flows 2 $2,500 4 $2,500 6 $2,500 8 $3,500 Rate of…

Q: Compute the future value in year 9 of a $3,300 deposit in year 1, and another $2,800 deposit at the…

A: The future value of a cash flow is the future worth of a cash flow at a certain arte of interests…

Q: 2. Using the formula which is attached below, calculate the Future Value of disposable amount of…

A: With the help of above formulae, the future value can be calculated with the help of following…

Q: What is the amount C of quarterly deposits such that you will be able to withdraw the amounts shown…

A: Computation:

Q: Find the value of A so the two cash flows below are equivalent for an interest rate of 10%…

A: Interest rate (r) = 10% per annum = 2.5% per quarter We need to equate present values of both the…

Q: If Treasury bills are currently paying 6 percent and the inflation rate is 2.3 percent, what is the…

A: Data given: Treasury bill rate = 6% Inflation rate= 2.3% Required: i) Approximate real rate ii)…

Q: Given a 5 percent interest rate, compute the year 6 future value of deposits made in years 1, 2, 3,…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: What is the future value of $1,670 in 14 years assuming an interest rate of 8.5 percent compounded…

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

Q: Suppose you receive cashflows of $10 at year 1, $12 at year 2, $14 at year 3 and $16 at year 4. What…

A: Solution:- Value of cash flows at year 2 = Future value of year 1 cash flow for 1 year + Year 2 cash…

Q: What will a deposit of $2500 at 7.8% compounded semiannually be worth if left in the bank for six…

A: Formula for Future Value FV=PVx(1+r/2)nxt Where, FV = Future Value PV = Present Value r = rate of…

Q: If $525$⁢525 is invested at 14%14%, how much money will be in the account after 3030 months? Round…

A: An amount is the total payments received after a period of time for which it is borrowed.

Q: Given a 3 percent interest rate, compute the year 6 future value of deposits made in years 1,2,3,…

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

Q: For a sum of money invested at 11.5% compounded for 5 years state the following values. i) The…

A: Compound interest is when you reinvest the interest earned back so in the next period we earn even…

Q: The following situations involve the application of the time value of the money concept. Use the…

A: As per Bartleby answering guidelines answered the first 3 subparts. Kindly post the other question…

Q: For each of the following annuities, calculate the future value. (Do not round intermediate…

A: Given: Annual payment(PMT) Years(NPER) Interest rate(Rate) $1,760 10 7% $8,300 32 8% $4,200…

Q: Compute the present value of a $5,400 deposit in year 3, and another $4,900 deposit at the end of…

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

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: $3300 8% compounded quarterly $1200 1 4 5 6 7 8 Quarters

A: a) Effective rate can be computed in excel as follows: Answer would be:

Q: Compute the future value in year 9 of a $2,000 deposit in year 1, and another $1,500 deposit at the…

A: Future Value = Present Value *(1+r)N - Invest period

Q: What is the value in year 4 of a $710 cash flow made in year 6 if interest rates are 9 percent? ( do…

A: We need to compute the present value of an amount 2 years prior to the cash flow. It can be…

Q: Treasury bills are currently paying 8 percent and the inflation rate is 3 percent. What is the…

A: The nominal rate of return is the rate of return stated on the financial agreement or security. It…

Q: What is the interest rate per annum (in percentage form) applied when the Php5,000 triples in 25…

A: Given: Particulars Amount Present value(PV) 5,000 Years(NPER) 25

Q: 1. Compute the present value of a $2,000 deposit in year 1, and another $1,500 deposit at the end of…

A: Present value means the actual amount is adjusted with the interest rate so as to get the present…

Q: Treasury bills are currently paying 4.6 percent and the inflation rate is 1.9 percent. a. What is…

A: Given:

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: Let y be the balance in an account if you deposit $5000 for x years at 4% APR compounded monthly.…

A: APY is the annual yield or the interest rate which has been compounded annually.

Q: If you deposit $45,000 into an account earning 4% interest compounded quarterly per year: 1- How…

A: Future value = Present value * (1+r)^n Where, r = rate of interest per period i.e. 4%/4 = 1% n =…

Q: The balance of an interest-bearing account can be modeled by an exponential equation. For example,…

A: Account balance after x year =$10000 x (1+5%)X

Q: Compute The present value of a $5500 deposit in year 1, and another $5000 deposit at the end of year…

A: Deposit in year 1 = $ 5500 Deposit in year 4 = $ 5000 Annual interest rate = 8%

Q: Treasury bills are currently paying 7 percent and the inflation rate is 2.7 percent. a. What is the…

A: Real interest rate is the rate that is adjusted for inflation. In other words, the interest rate…

Q: equivalent worth for the annual cash flow series at an interest rate of 10% per year compounded…

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

Q: If Treasury bills are currently paying 6.45 percent and the inflation rate is 1.4 percent, what is…

A: Formula for Approximate real rate = Nominal Rate - Inflation rate Formula for Exact Real Rate =( 1 +…

Q: Use the following time value of money tables for Questions 1-4. Round answers to the nearest dollar.…

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

Q: What is the value in year 15 of a $260 cash flow made in year 4 if interest rates are 12 percent?…

A: Future value can be defined as the monetary value of an asset on an individual date in future…

Q: f the stated annual rate of interest compounded annually is 8% then what is the equivalent annual…

A: Nominal Interest rate is 8% No. of compounding periods are 365 To Find: Equivalent annual rate…

Q: Compute the present value of a $2,000 deposit in year 1, and another $1,500 deposit at the end of…

A: Deposit in year 1= $2000 Deposit in year 3 = $1500 Interest rate = 10%

Q: If the nominal interest rate is 3%, how much is $5000 worth in 10 years in a continuously compounded…

A: The future value with continuous compounding can be used to calculate account worth after 10 years.…

Q: 1. What balance will be in an account at the end of 10 years, if € 3 500 is deposited today and…

A: Future value refers to the value of an asset on a specified date in the future. It can be calculated…

Q: If the bank is paying 8% interest compounded quarterly, how many periods will there be in a…

A: The greater the number of compounding periods the higher is the interest received on the investment.

Q: Consider the cash flow series given in the accompanying table. What value of C makes the deposit…

A: Future Value of deposits at Year 5 = Present Value of withdrawals at Year 5 Interest Rate = 6%…

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

What is the value in year 5 of a $740 cash flow made in year 7 if interest rates are 9 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Trending now

This is a popular solution!

Step by step

Solved in 6 steps with 3 images

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

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.
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.
What is the value in year 11 of a $2,100 cash flow made in year 3 if interest rates are 8 percent?
Suppose you invest $1,500 in an account paying 6% interest per year. How much of this balance corresponds to interest on interest earned in the last (7th) period? (Dollar figures should be approximated to the nearest cent of a dollar, while rates should be expressed in percentage terms without using the "%" symbol and approximated to the nearest second decimal place.)
What is the present value of a perpetuity of $8,447 per year given an interest rate of 8.2%, assuming that the first cash flow occurs today (that is, in year 0)? Record your answer as a dollar amount rounded to 2 decimal places , but do not include a dollar sign or any commas in your answer . For example , enter $ 12,327.24987 as 12327.25 .
Question 9 What is the value in year 4 of a $1,600 cash flow made in year 5 if interest rates are 8 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Value in 4Years
If you deposit $700 in a bank account that earns 5 percent per year, how much total interest will you have earned after the third year? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Total Interest =
Suppose you deposit $ 1296 today and your account will accumulate to $ 5637 in 9 years. What is the rate of interest? Input your answer in decimals, not percentages. Round your answer to four decimals places.
Compute the present value of a $2,000 deposit in year 1, and another $1,500 deposit at the end of year 3 if interest rates are 10 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Need answers ASAP... If P100 is deposited in a savings account that pays 6% annual interest, what amount has accumulated by the end of the eighth year? How much of this is interest and how much is principal? Draw the cash flow diagram.
Q6 What is the value in year 11 of a $2,500 cash flow made in year 3 if interest rates are 9 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places.) VALUE IN YEAR 11?
1. What is the total present value of the cash receipts X today (at time 0) if interest is 4.4% payable quarterly?2. What is the total accumulated value of the cash receipts X right after the last payment (at time 10) if interest is 4.4% payable quarterly?3. What is the total interest earned at the end of the term of this cash flow?4. How much is the cash receivable X by Rafa at the end of each quarter at the same interest charged if its net present value is 50,000?5. Ken receives Y at the end of each semiannual period over the same term at 2.5% interest payable semiannually for this cash flow. Calculate Y if its total worth today is 50,000.6. For the previous problem who earned more based on the net value of their cash receipts at the end of the term? Ken or Rafa?