Q10.4. Find the present worth sum of money that would be equivalent to the future amounts of $5000 in year 6 and $7000 in year 8 if the real interest rate is 10% per year and the inflation rate is 5% per year. Solve using the factors and their equations with (a) an inflation-adjusted rate, and (b) the real interest rate.

Q10.4. Find the present worth sum of money that would be equivalent to the future amounts of $5000 in year 6 and $7000 in year 8 if the real interest rate is 10% per year and the inflation rate is 5% per year. Solve using the factors and their equations with (a) an inflation-adjusted rate, and (b) the real interest rate.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Find the present worth sum of money that would be equivalent to the future amounts of $5000 in year 6 and $7000 in year 8 if the real interest rate is 10% per year and the inflation rate is 5% per year. Solve using the factors and their equations with (a) an inflation-adjusted rate, and (b) the real interest rate. Solve manually please
a) You invest 155 000 TL for a year. At the end the year, you have 174 375 TL net in your account. If the inflation realizes at %10 fot this year, calculate real rate of return? Can real interest rates be negative? Give a simple example?
8. If the concern is for the value that existing money will have next year, the formula for the intertemporal value of money can be expressed as follows: Next Year's Value = Present Value (1 + r). For example, if the interest rate is 10% and the present value is $100, the $100 will increase to $110 at the end of a year. a. Using this algebraic expression, show the formula for the present value of future income and calculate what $200 received next year is worth now. b. What is the present value of $100 received 2 years from now?
What is the uninflated present worth of a ₱200,000 future value in two years if the average inflation rate is 6% and interest rate is 10%.
if you invest P10,000 with a rate of interest of 12% compounded annually, compute the interestof your investment after 10 years if the inflation rate is 10% annually. Ans.P1,974.39
The future amount of P100,000 for a period of 8 years is equal to P341,655.49, considering money is worth 10% per year with an inflation rate of x percent. Find the value of x.
$1000 accummualtes to $1500 in 5 years time and the rate of inflation is 3% p.a. What is the annual effective real rate of return? Question 6Select one:Select one: A. 5.29% B. 6.38% C. 11.70% D. 2.25%
Revenue from a project is expected to be $7000 per year in real terms (i.e. an identical project would earn $7000 in revenue today). If the expected inflation rate is 2.4%, what is the nominal value of the annual revenue (the actual number of dollars received) 8 years from now? Question 4Answer a. $8462 b. $8666 c. $8264 d. $8070
Urgently need the answer. You are paying a series of five constant-dollar (or real-dollar) uniform payments of $1,256.02 beginning at the end of first year. Assume that the general inflation rate is 15.42% and the market interest rate is 15.42% during this inflationary period.The equivalent present worth of the project is: Enter your answer as follow: 1234.56
The present worth of a decreasing geometric series is 96157$. The interest rate is 8% per year and the rate of change is 10% per year. If the cash flow amount in year 1 is 20000 determine the year in which the gradient ends
4. You are planning to invest OMR 2,500 today for three years at a nominal interest rate of 9 percent with annual compounding. a) What would be the future value of your investment? b) Now assume that inflation is expected to be 3 percent per year over the same three-year period.What would be the investment’s future value in terms of purchasing power? c) What would be the investment’s future value in terms of purchasing power if inflation occurs at a 9 percent annual rate?
Suppose you have $1,000,000 today and starting a year from now you intend to spend this money over the next 30 years. Assume the nominal rate of interest is 9.2%, inflation rate of 5% and the real rate of interest is 4%. How much can you spend annually in real dollar terms over the next 20 years to ensure constant spending in real terms? A. $40,000.00 B. $57,830.10 C. $64,011.96 D. $73,581.75

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