Assume r=0.1. What is the present value of the following stream of cash flow? Year 1 1000 Year 2 1000 Year 0 Year 3 Year 4 Year ... 1000 1000 1000 1000 ....... 11000 100000 12000 10000
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- QUESTION 4 A cash flow consists of $100 income at the end of Year 1, $200 at the end of Year 2, $300 at the end of Year 3, and so forth for ten years. What is the equivalent uniform annual cash flow? Use i = 10%.6) Two annuities in perpetuity have the same effective annual interest rate. The first annuity pays $40 every 5 years, starting at the end of the 10th year and has present value $100. The second annuity pays $20 at the end of each 3 months, starting at the beginning of the first three months. Find the present value of the second annuity.1.Calculate the present value of a growing annuity given the following information: annual cash flows = $300,000; cash flow growth rate = 3%; required rate of return = 10%; timeframe = 55 years.
- QUESTION 1 Muhammad takes out a loan of $ 2,130, at 8% simple interest, for 8 years. How much will he pay back at the end of year 8? QUESTION 2 Calculate the amount of interest on an investment of AED 103,971 at 8% simple interest for 5 years. QUESTION 3 If you deposit today $7,335 in an account for 6 years and at the end accumulate $10,885, how much compound interest rate (rate of return) you earned on this investment ? QUESTION 4 You will deposit 12,025 at 10% simple interest rate for 9 years, and then move the amount you would receive to an investment account at 12 % compound rate for another 3 years. How much money would you have at the end of the entire period ?Find the future value and total interest of the annuity. (Round to the nearest cent as needed.) Annuity type Periodic payment Annual interest rate Payment paid Years Ordinary annuity $2,100 6% Quarterly 3 Future Value of $1.00 Ordinary Annuity Rate per period Periods 0.25% 0.50% 0.75% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2 2.002 2.005 2.008 2.010 2.015 2.020 2.025 2.030 2.035 2.040 3 3.008 3.015 3.023 3.030 3.045 3.060 3.076 3.091 3.106 3.122 4 4.015 4.030 4.045 4.060 4.091 4.122 4.153 4.184 4.215 4.246 5 5.025 5.050 5.076 5.101 5.152 5.204 5.256 5.309 5.362 5.416 6 6.038 6.076 6.114 6.152 6.230 6.308 6.388 6.468 6.55 6.633 7 7.053 7.106 7.159 7.214 7.323 7.434 7.547 7.662…c. You want $1,000,000 in the bank when you retire in 35 years. How much should you deposit each year? Assume an interest rate of 10%. What is the annual payment if you defer retire to 40 years?
- Suppose $5,000 is invested at an annual interest rate of 7%. Compute the balance after10 years if the interest is compounded:a. Annuallyb. Quarterlyc. Monthlyd. ContinuouslyA department store has offered you a credit card that charges interest at 1.05% per month, compounded monthly. a. What is the nominal interest (annual percentage) rate for this credit card? b. What is the effective annual interest rate?Across: 2. payment interval is diffent from compounding period 4. Sequence oof payment made at equal interval of time 5. payment interval is = to compounding period 3 5 7. payments are made at the end of each payment intrval 1 8. Time from start of first payment to the last payment 2 Down: 7 6 1. amount of money required in the beginning. annuity whose 1st payment will sat some future date 6. sum of the accumulated values of the periodic paymen 8
- 06. For the cash flow diagram below it -10% answer the following questions: ÏÏ a. Find the present worth (PW) at year 0 for the base amount (2005 across all years). b. Find the present worth (PW) at year 0 for the gradient amount. C. Find the total present worth (PW) at year 0 for both base amount and gradient amount. d. If the cash flow in the table is converted into 2 equal payments, one in year 4 and the other in year 6, what should be the value of each payment? 200 B? increase 50$2. A loan of $25,000 was repaid at the end of 9 months with $28,500. What annual rate of interest wascharged?3. If an investment company pays 16% compounded quarterly, how much should you deposit to have $5,000two years from now?Example 2: EOY NCF ($) 1 100 2 90 3 80 4 70 find the present value at 10% interest of the series of payments given in Example 2.