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.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 ?
- 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.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 $5,000 is invested at an annual interest rate of 7%. Compute the balance after10 years if the interest is compounded:a. Annuallyb. Quarterlyc. Monthlyd. ContinuouslyA department store has offered you a credit card that charges interest at 1.05% per month, compounded monthly. a. What is the nominal interest (annual percentage) rate for this credit card? b. What is the effective annual interest rate?Across: 2. payment interval is diffent from compounding period 4. Sequence oof payment made at equal interval of time 5. payment interval is = to compounding period 3 5 7. payments are made at the end of each payment intrval 1 8. Time from start of first payment to the last payment 2 Down: 7 6 1. amount of money required in the beginning. annuity whose 1st payment will sat some future date 6. sum of the accumulated values of the periodic paymen 8
- 06. For the cash flow diagram below it -10% answer the following questions: ÏÏ a. Find the present worth (PW) at year 0 for the base amount (2005 across all years). b. Find the present worth (PW) at year 0 for the gradient amount. C. Find the total present worth (PW) at year 0 for both base amount and gradient amount. d. If the cash flow in the table is converted into 2 equal payments, one in year 4 and the other in year 6, what should be the value of each payment? 200 B? increase 50$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 2.2. 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?