Answered: ow your solution The present worth of…

ow your solution The present worth of $5,000 in year 3, $10,000 in year 5, and $10,000 in year 8 at an interest rate of 12% per year is closest to, a.$13,300 b.$16,200 c.$14,900

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 9EB: If you invest $15,000 today, how much will you have in (for further instructions on future value in...

See similar textbooks

Related questions

Q: You will deposit 14,061 at 10% compound interest for 6 years, and then move the amount you would…

A: Given Information, Principal amount = 14,061 Compounded Interest rate =10% Time Period for which…

Q: ou invest $1,400 today and expect to sell your investment for $3,200 in 10 years. a-1. Calculate…

A: PV is used to calculate the existing worth of future cash flows for decision making.

Q: You invest $500 today and an additional investment of $500 three years from today. You expect to…

A: Present value refers to the current value of a sum of money in the future at a specified interest…

Q: Suppose you found an investment that earns 6.0% each year. Suppose you want to withdraw 11,000…

A: Present value is the value of future cashflow at todays date discounted at specified rate. formula:…

Q: 3. Time Value of Money Assume that ten years from now, you will need $10,000 and that your bank…

A: The concept of the time value of money states that money today has more value than the same amount…

Q: Suppose you earned a $355,000 bonus this year and invested it at 8.25% per year. How much could you…

A: Solution: An equal amount withdrawn every period at end of period is called ordinary annuity.…

Q: How much money does Brian need to deposit now?

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: Instruction: Please calculate the correct amount and show your computation. 1. The future value of…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Question Content Area Use the present value and future value tables to answer the following…

A: Answer:- A Present value is $1,643.79 or $1,644. Computation of present value:- PV = FV / (1+r)^n…

Q: The present value of $10,000 to be received five years from today, assuming a discount rate of 9%…

A: The given problem can be solved using PV function in excel. PV function computes present worth for…

Q: Excel format available in MyLab Finance. MyLab 5-1. (Power of Compounding) If you'd like to have…

A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Q: An investment company pays 9% compounded semiannually. You want to have $16,000 in the future. (A)…

A: Compound interest is the addition of interest to in other words, the principal amount of a loan or…

Q: Suppose you earned a $295,000 bonus this year and invested it at 8.25% per year. How much could you…

A: Given , P=? Pv=295000 Bonus invested i=intt rate=8.25 % or…

Q: Q1. you put in GH¢ 10,000 today in an investment account that will yield 10% p.a. for 4 years. What…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Suppose that money can be invested at 10% compounded annually. a. Accumulate ₱ 5,000 for 10 years ;…

Q: Task 1 The following are two investment scenarios: Scenario 1: £8,000 at 6.5% with simple interest…

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: Suppose you receive cashflows of $10 at year 1, $12 at year 2, $14 at year 3 and $16 at year 4. What…

A: Solution:- Value of cash flows at year 2 = Future value of year 1 cash flow for 1 year + Year 2 cash…

Q: An investor saves £30 at the beginning of eachmonth for 10 years and then this payment is increased…

A: Future value of a series of payment (in case of annuity due) can be computed by using the following…

Q: What is the present value if you can earn 8% interest compounded annually?

A: NOTES: PV : Present Value FV : Future Value r : rate n : number of years.

Q: You plan to invest $40,000 at the end of each of the next 25 years. If the investment account pays…

A: Amount Deposit each year = $40,000 Interest Rate (r) = 5% Years(n) = 25

Q: Suppose you found an investment that earns 6.0% each year. Suppose you want to withdraw 24,000…

A: Given information: Investment earns 6% Future value is $24,000 Number of years is 4

Q: 2. You invest $12,000 a year in to a retirement fund starting at age 25 and continue to do so until…

A: As you have asked a question with multiple parts, we will solve the first 3 parts as per Bartleby…

Q: A construction company wants to accumulate a given amount to buy a new equipment in the future. 1…

A: In investment management, the future value concept helps in the determination of the investments at…

Q: 6. If money can be invested at 6% compounded annually, A. Accumulate P8,000 for 12 years. B.…

A: Compounding is a way to find the FV of present amount by considering appropriate rate or CVF. It…

Q: Time value of money practice problems. How would you solve these using a financial calculator?…

A: The computation of the Future value as follows:

Q: QUESTION 1 You just put $1,000 in a bank account that pays 6 percent nominal annual interest,…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Find the required value for each problem. Show the formula used and the counts for each problem. 1.…

A: Because you have psoted multiple questions, we will answer the first question only, for the…

Q: Consider two investments: Invest $1,000 and receive $110 at the end of each month for the next 10…

A: The future worth of both the options can be calculated as follows : Results obtained :

Q: Suppose you earned a $595,000 bonus this year and invested it at 8.25% per year. How much could you…

A: Amount that can be withdrawn at end of each of 20 years can be calculated using PMT function in…

Q: What is the value of a perpetuity of P100 per year if the discount rate is 5% and the cash flows do…

A: Present Value: It represents the present value of the future sum of the amount and is computed by…

Q: 3. Time Value of Money Assume that ten years from now, you will need $10,000 and that your bank…

A: As you have asked multiple questions we will solve all parts of the first question for you as per…

Q: Investment Problem If the nominal interest rate is 3%, how much is P5,000 worth in 10 years in a…

A: Investment amount (P) = P 5,000 Interest rate (r) = 3% Period (t) = 10 Years Mathematics constant…

Q: Question 3 You are considering to invest in a savings plan. The plan offers a rate of return of 8…

A: Interest rate (r) = 8% Saving in year 1 (S1) = RM 1500 S2 = RM 1250 S3 = 6400

Q: If for five years, the cash inflows are uniform at P120,000 which present value of annuity factor…

A: Interest rate (r) = 12% Number of annual cash flow (n) = 5

Q: Ipswich Corporation is considering an investment opportunity with the expected net cash inflows of…

A: The answer is as follows

Q: Problem Solving. Solve the following problems that deal with Present Value of money or Future Value…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: 1/ Ipswich Corporation is considering an investment opportunity with the expected net cash inflows…

A: Net Present Value is the difference between the present value of cash inflows and cash outflows.

Q: What is the amount that an investor wants to pay for a perpetuity that will provide $20,000 per year…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Q1/ Ipswich Corporation is considering an investment opportunity with the expected net cash inflows…

Q: 100,000 dollars are invested in compound interest for four years from 10% annually. Find the future…

Q: 1) A man wants to invest a sum of P50,000 in two investments. The first investment earns a rate of…

A: Investment- The purchase of an asset for the purpose of creating income or capital gain is referred…

Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

show your solution

The present worth of $5,000 in year 3, $10,000 in year 5, and $10,000 in year 8 at an interest rate of 12% per year is closest to,

a.$13,300

b.$16,200

c.$14,900

d.$12,100

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
If you invest $12,000 today, how much will you have in (for further Instructions on future value in Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at l5% D. 19 years at 18%
Assume you invest $1 000 at the end of this year, at the end of the second year, and at the end of the third year. How much will you have at the end of the fourth year if interest rates are 5% p.a.? Select one: a. $3,405.54 b. $3,310.12 c. $3,215.41 d. $3,100,21
a. Find the FV of $1,000 invested to earn 10% after 5 years. Round your answer to the nearest cent. $ b. What is the investment's FV at rates of 0%, 4%, and 25% after 0 , 1, 2, 3, 4, and 5 years? Round your answers to the nearest cent. Year 0 1 2 3 4 5 $ $ $ $ $ $ 0% $ $ $ $ $ $ Interest Rate 4% $ $ $ $ $ $ 25%
a. Find the FV of $1,000 invested to earn 12% after 6 years. Round your answer to the nearest cent. $4 b. What is the investment's FV at rates of 0%, 6%, and 20% after 0, 1, 2, 3, 4, and 5 years? Round your answers to the nearest cent. Interest Rate Year 0% 6% 20% $4 $ $ 2$ $ $ 2 $ 2$ $ 2$ $ 4 24 24 $ 2$ 24 Choose the correct graph of future value as a function of time and rate. Note: blue line is for 0%, orange line is for 6%, and grey line is for 20%. The correct graph is
Assume that you will receive $2,000 a year in Years 1 through 5, $3,000 a year in Years 6through 8, and $4,000 in Year 9, with all cash flows to be received at the end of the year. Ifyou require a 14 percent rate of return, what is the present value of these cash flows? a. $ 9,851b. $13,250c. $11,714d. $15,129e. $17,353
An investment pays you $30,000 at the end of this year, and $15,000 at the end of each of the four following years. What is the present value (PV) of this investment, given that the interest rate is 3% per year? A. $66,507 B. $83,259 OC. $41,630 OD. $99,911 Clear all Check answer
What is the present value of $14,000 to be received in one year if the interest rate is 8% p.a.? a. $6000 b. $15120 c. $12963 d. $22000
Assume you invest $15,000 today. How much will you have in six years at an interest rate of 9%? Future Value of $1: 8% 123456 1.080 1.166 1.260 1.360 1.469 1.587 OA. $23.805 OB. $25,155 OC. $26.580 OD. $23,085 9% 1.090 1.188 1.295 1.412 1.539 1.677 10% 1.100 1.210 1.331 1.464 1.611 1.772 MAKED ہے
What is the total future value ten years from now of $400 received in 1 year, $350 received in 2 years and $900 received in 8 years if the interest rate is 5% per year? O a $2,047.15 O b. $2,100.11 Oc $2,299.15 Od. $2,129.89 O e. $2.254.44
Find the annual worth (AW) of the following investments (from year 1 to year 20) if you invest $600 per year in years 6 to 12; and then increase the investment by $200 per year from year 13 to year 20 [i.e., cash flow in year 13 becomes $800, in year 14 becomes $1,000, ... etc.]. The interest rate is 10% per year. i 10% P/F A/P A/F P/G (F/P,i,n) = (1 + i)" 1 0.9091 1.1000 1.0000 0.000 2 0.8264 0.5762 0.4762 0.826 (1 + i)" –1 i(1 + i)" 3 0.7513 0.4021 0.3021 2.329 (P/A,i,n) = 4 0.6830 0.3155 0.2155 4.378 0.6209 0.2638 0.1638 6.862 6 0.5645 0.2296 0.1296 9.684 (1 + i)" –1 i 7 0.5132 0.2054 0.1054 12.763 (F/A,i,n) = 8 0.4665 0.1874 0.0874 16.029 %3D 9 0.4241 0.1736 0.0736 19.421 10 0.3855 0.1627 0.0627 22.891 26.396 29.901 (1 + i)" – in – 1 (1 + i)" 11 0.3505 0.1540 0.0540 (P/G,i,n) = - %3D 12 0.3186 0.1468 0.0468 13 0.2897 0.1408 0.0408 33.377 14 0.2633 0.1357 0.0357 36.800 (A/G.im) = } -+ -1 15 0.2394 0.1315 0.0315 40.152 n (1 + i)" – 1 16 0.2176 0.1278 0.0278 43.416 17 0.1978 0.1247…
j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 10%. Payment $100 $300 $500 Year 1 2 3 Round your answers to the nearest cent. PV of investment: $ FV of investment: $