FINANCIAL MANAGEMENT(LL)-TEXT
16th Edition
ISBN: 9781337902618
Author: Brigham
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 18P
a)
Summary Introduction
To determine: The
b)
Summary Introduction
To determine: The future value of $200 for each 3 months for 5 years quarterly compounded at a nominal rate of 12%.
c)
Summary Introduction
To determine: The reason why the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Find the present values of the following ordinary annuities: a. PV of $400 each six months for five years at a simple rate of 12 percent, compounded semiannually b. PV of $200 each three months for five years at a simple rate of 12 percent, compounded quarterly c. The annuities described in parts (a) and (b) have the same amount of money paid into them during the five-year period and both earn interest at the same simple rate, yet the present value of the annuity in part (b) is $31.46 greater than the one in part (a). Why does this occur?
Find the future values of the following ordinary annuities:a. FV of $400 paid each 6 months for 5 years at a nominal rate of 12% compounded semiannuallyb. FV of $200 paid each 3 months for 5 years at a nominal rate of 12% compounded quarterlyc. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?
Find the future values of the ordinary annuities at the given annual rate r compounded as indicated. The payments are made to coincide with the periods of compounding. (Round your answer to the nearest cent.)
PMT = $200, r = 2.7%, compounded semiannually for 25 years
Chapter 4 Solutions
FINANCIAL MANAGEMENT(LL)-TEXT
Ch. 4 - Prob. 2QCh. 4 - An annuity is defined as a series of payments of a...Ch. 4 - If a firm’s earnings per share grew from $1 to $2...Ch. 4 - Prob. 5QCh. 4 - If you deposit 10,000 in a bank account that pays...Ch. 4 - What is the present value of a security that will...Ch. 4 - Your parents will retire in 18 years. They...Ch. 4 - Prob. 4PCh. 4 - You have $42,180.53 in a brokerage account, and...Ch. 4 - What is the future value of a 7%, 5-year ordinary...
Ch. 4 - An investment will pay 100 at the end of each of...Ch. 4 - You want to buy a car, and a local bank will lend...Ch. 4 - Find the following values, using the equations,...Ch. 4 - Use both the TVM equations and a financial...Ch. 4 - Find the future value of the following annuities....Ch. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Find the interest rate (or rates of return) in...Ch. 4 - Prob. 16PCh. 4 - Find the present value of 500 due in the future...Ch. 4 - Prob. 18PCh. 4 - Universal Bank pays 7% interest, compounded...Ch. 4 - Sales for Hanebury Corporation’s just-ended year...Ch. 4 - Washington-Pacific (W-P) invested $4 million to...Ch. 4 - A mortgage company offers to lend you 85,000; the...Ch. 4 - To complete your last year in business school and...Ch. 4 - Prob. 25PCh. 4 - You need to accumulate 10,000. To do so, you plan...Ch. 4 - Prob. 27PCh. 4 - Assume that you inherited some money. A friend of...Ch. 4 - Assume that your aunt sold her house on December...Ch. 4 - Your company is planning to borrow $1 million on a...Ch. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - You want to accumulate $1 million by your...Ch. 4 - Prob. 1MCCh. 4 - Prob. 2MCCh. 4 - We sometimes need to find out how long it will...Ch. 4 - If you want an investment to double in 3 years,...Ch. 4 - Whats the difference between an ordinary annuity...Ch. 4 - Prob. 6MCCh. 4 - Prob. 7MCCh. 4 - Define the stated (quoted) or nominal rate INOM as...Ch. 4 - Will the effective annual rate ever be equal to...Ch. 4 - (1) Construct an amortization schedule for a...Ch. 4 - Prob. 11MCCh. 4 - (1) What is the value at the end of Year 3 of the...Ch. 4 - Suppose someone offered to sell you a note calling...
Knowledge Booster
Similar questions
- If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?arrow_forwardTwo annuities - certain of 1 p.a. are each payable half-yearly for n years. The first payment under one is due at the end of 3 months and under the other at the end of 6 months from now. The total present value of the two annuities is 20.255. The amount of an annuity of 1 per quarter in arrear for n years is 47.719. If the same effective rate of interest applies throughout, find n and the rate of interest.arrow_forwardFind the future values of the following ordinary annuities: FV of $700 paid each 6 months for 5 years at a nominal rate of 8% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ FV of $350 paid each 3 months for 5 years at a nominal rate of 8% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?arrow_forward
- Find the future values of the following ordinary annuities. FV of $600 each 6 months for 8 years at a nominal rate of 16%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ FV of $300 each 3 months for 8 years at a nominal rate of 16%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ The annuities described in parts a and b have the same amount of money paid into them during the 8-year period, and both earn interest at the same nominal rate, yet the annuity in part b earns more than the one in part a over the 8 years. Why does this occur?arrow_forwardFind the future values of the following ordinary annuities: a. FV of $500 paid each 6 months for 5 years at a nominal rate of 6% compounded semiannually. Do not round Intermediate calculations. Round your answer to the nearest cent. $ b. FV of $250 paid each 3 months for 5 years at a nominal rate of 6% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur? -Select-arrow_forwardFind the future values of the following ordinary annuities: a. FV of $600 paid each 6 months for 5 years at a nominal rate of 6% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ b. FV of $300 paid each 3 months for 5 years at a nominal rate of 6% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur? 819000.0 The annuity in part (b) is compounded more frequently, therefore, more interest is earned on previously-earned interest. Varrow_forward
- Find the future values of the following ordinary annuities a. FV of $800 paid each 6 months for 5 years at a nominal rate of 16% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent b. PV of $400 paid each 3 months for 5 years at a nominal rate of 16% compounded quarterly. Do not round intermediate calculations. Round y These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the anity in p The annuity in part (8) is compounded less frequently therefore, mare interest is earned in prestly and intere Hide Feedback Incorrect a. Why does this use? Check My Work (marrow_forwardFind the future values of the following ordinary annuities: FV of $400 paid each 6 months for 5 years at a nominal rate of 4% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.$ FV of $200 paid each 3 months for 5 years at a nominal rate of 4% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.$arrow_forwardFind the present values of these ordinary annuities.Discounting occurs once a year.a. $600 per year for 12 years at 8%b. $300 per year for 6 years at 4%c. $500 per year for 6 years at 0%d. Rework parts a, b, and c assuming they are annuities due.arrow_forward
- Find the present values of these ordinary annuities. Discounting occurs once a year. a. $600 per year for 12 years at 8% b. $300 per year for 6 years at 4% c. $500 per year for 6 years at 0% d. Rework parts a, b, and c assuming they are annuities due.arrow_forwardThe present values of the following three annuities are equal: • perpetuity immediate paying 1 year year, calculated at an annual effective interest rate of 7.25%. • 50-year annuity immediate paying 1 each year, calculated at an annual effective interest rate of j%. • n−year annuity immediate paying 1 each year, calculated at an annual effective interest rate of j − 1%. Calculate n.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College