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- You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityYou put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.(1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?
- Assume that you are going to receive $468 yearly until the day of your retirement (15 years from now). What is the future value (the day of your retirement) of all these cash flows if the interest rate is 8.69%?Use the formula A = Pert to find the future value after 20 years of a $7,000 account that earns 8% interest compounded continuously, then compare that to the future value of the same account if interest is compounded annually. Round to the nearest cent. The future value of the account with interest compounded continuously is The future value of the account with interest compounded annually is The account earns $____ (what dollar amount) [more/less] when interest is compounded continuously %24If (P) dollars are invested at the end of each year in an annuity that bears interest at an annual rate (r), the amount in the account will be (A) dollars after (n) years, where: n = log [Ar / P + 1] / log (1 + r) If $ 5,200 is invested each year in an annuity that earns 9% annual interest, when will the account be worth $ 25,000? Round to the nearest tenth.
- Suppose a deposit of R dollars is made at the end of each year, and assume an APR of r% compounding continuously. (a) If we invest like this for 3 years, what is the value of the account after the third year? (b) If we are making these payments for 3 years, how much money must we invest today to cover the payments? (c) If we make these payments in perpetuity, find a formula which describes the amount of principal we must invest today to cover all future payments. (d) If we invest like this for three years, but instead use an account with an APR s% compounded weekly, determine s so that this second account has the same value as your answer in part (a) after three years.What is the present worth of annually payments ( 2000 $ ) if the first payment will deposit after five from now , and the last one will deposit at begin of the fifteenth year ? Assume interest rate ( 7 % ) ?If you invest $3.000 today, how much would you have in your account in 35 years from now if the interest rates are 7.0256% per year? Assume interest is compounded semiannually. Answer with formulas in Excel will be appreciated.
- (Future value) If you deposit $3,500 today into an account earning an annual rate of return of 11 percent, what would your account be worth in 35 years (assuming no further deposits)? In 40 years? a. If you deposit $3,500 today into an account earning an annual rate of return of 11 percent, what would your account be worth in 35 years? What would your account be worth in 40 years?Assume you have just found out you are entitled to receive $102,000 in 19 years. If the interest rate is 18 percent, what should you be willing to take today in exchange for the future payment? (Enter your answer as a positive number rounded to 2 decimal places.)What is the future value in 4 years of €1,000 invested in an account with a stated annual interest rate of 10 per cent, Required: (a) What is the future value if compounded annually? Future value € (b) What is the future value if compounded semi-annually? Future value € (c) What is the future value if compounded monthly?
