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- A bank loan of P6,000,000 at 10% pa, is to be paid in 10 equal payments, the first of which to be paid two years from now. How much does Mr. Eden still owe to the bank before he is going to make the 9th payment? Show your cash flow diagram. O .P1,211,510 O P1,341,154 O P 2,050,592 O P 976,472What is the amount of the quarterly deposits A such that you will be able to withdraw the amounts shown in the cash flow diagram if the interest rate is 6% compounded quarterly? Q 6% Compounded quarterly $2,500 $1,600 Quarters 0 1 2 3 4 5 6 7 8 The amount of the quarterly deposits A should be $ (Round to the nearest dollar.) (Deposit)Suppose the bank will give you 5 percent interest rate for your money on deposit and the rate of inflation is 3 percent. In this case you must sacrifice €100 euros of current consumption in order to enjoy: A €105 of future consumption B €5 of future consumption C €102 of future consumption in real terms D €108 of future consumption in real terms
- What is the equivalent uniform annual payment for the following cash flows if the interest rate is 10%? Populate the following table and compute the equivalent uniform annual payment. Show all work and provide an explanation. Do not use Excel. [Hint: This problem is a mix of annuity, gradient, and a single future cash flows.] ΕΟΥ Cash Flows Annuity Gradient Future 1 $2,000 2 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $14,000 IN 3 st 4 5 6 7. 8 9 10(Time Value of Money) Read and analyze each given scenario and provide what is asked. Show your complete solutions. 1. It is now January 1, 20x8. Today you will deposit P100,000 into a savings account that pays 8%. a. If the bank compounds interest annually, how much will you have in your account on January 1, 20x9? b. What will your January 1, 20x9 balance be if the bank uses quarterly compounding? 2. It is now January 1, 2x16, and you will need P100,000 on January 1, 2x20. Your bank compounds interest at an 8% annual rate. How much must you deposit today to have a balance of P100,000 on January 1, 2x20? 3. If you deposited P200,000 in a bank account that pays 6% interest annually, how much will be in your account after five (5) years? 4. What is the present value of a security that will pay P290,000 in 20 years if securities of equal risk pay 5% annually? 5. What is the future value of a 5%, 5-year ordinary annuity that pays P8,000 each year? If this was an annuity…(b) Suppose that you took out PTPTN loans totalling RM24000 with interest of 1% per year. You have an online payment plan which deducts savings from your bank account at a rate of RM100 per month. (Hint: Assume that the rate is evaluated based on the current balance of the loan.) (1) Write the initial value problem for the situation above. State all variables and the quantities they represent.
- Suppose the interest rate was 20% and the person earned 10K today. At point A, the person consumes the income he earns each year and does not borrow or lend. The value X is The value of W is Enter whole numbers without decimal points or dollar signs, e.g. enter $30,000 as 30000. Income/Consumption 1 Year in the Future w $24,000 Income/Consumption Today2. A loan earns an interest of 12% compounded- quarterly and should be paid within 6 yrs. How much is the loan if the mode of payment is made this way: CFD *focal point at 4, and draw a cash flow diagram LIFT 2 3 4 $ 15,000 $ 30,000 P 0 1 $ 20,000 5 i=12% compounded quarterly F = P(1 + i)n P=F(1+i)" 6 $40,000 REMEMBER THIS!Suppose you borrow from a bank $1,756.06 today (t=0). You agree to pay back $3,637.64 in 4 years (t=4). The interest rate (%) that the bank charge you is closest to ________%. Input your answer without the % sign and round your answer to two decimal places.
- You are currently investing your money in a bank account which has a nominal annual rate of 7 percent, compounded monthly. How many years will it take for you to double your money? Identify the following variables to help solve problem: m Nper (or N) =n*m Rate (or I/Y)=i/m PV PMT FVSuppose you put $1000 in an account today and you need to have $6727.5 in the future. If the bank pays 10%, how many years (n) will it take you to have $6727.5?PV = FV * 1 / (1+i)^n FV = PV * (1+i)^n If you wish to have $60,000 in 8 years, how much do you need to deposit in the bank today if the account pays an interest rate of 9%?