How much was initially invested if the value of the investment is at P200,000after 3 and a half years and the investment grows by 12.5% compoundedquarterly? An item will need replacing in 6 years from now at a cost of P128,000.00. Howmuch should the owner save at the beginning of each 3 months in order toreplace the old item, if his savings earn interest at 10% compounded quarterly?

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

Answered: How much was initially invested if the…

How much was initially invested if the value of the investment is at P200,000 after 3 and a half years and the investment grows by 12.5% compounded quarterly? *

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: The present worth of of P40,000 in the first year and amounts of increasing by P3,000 per year…

A: Here, Initial cash flow = P40,000 Increase in amount per year through five years = P3,000 Rate of…

Q: Find the nominal rate of an investment with duration of 4 and a half years compounded once a year.…

A: The nominal rate of investment can be found using the RATE function in excel. RATE = (NPER, PMT, PV,…

Q: How many years will it take $540 to grow to $11,515.44 if it is invested at 12 percent compounded…

A: In the above question we need to compute the number of years it will take to grow $540 to $11515.44…

Q: If you invest $5,000 now, and your investment pays 12% per annum, how much will you have in three…

A: Following information is given in the question: Investment today (Present value) = $5000 Annual…

Q: A one-year investment yields a return of 15%. The cash returned from the investment, including…

A: We have the following information: A one-year investment yields a return of 15% The cash returned…

Q: How much must you invest at 12% interest, compounding quarterly, in order to see your investment…

A: The amount of investment can be calculated by discounting the future value using the appropriate…

Q: How long will it take for $4,000 to grow to $7,000 if the investment earns an interest rate of 16%…

A: Given information: Future value is $7,000 Present value is $4,000 Interest rate is 16% compounded…

Q: An investment will return $125 at the end of each month for 5 years and then $250 at the end of each…

A: Value at the end of 5 years of $250 received for next 3 years every month, can be calculated as…

Q: If $5,000 is invested at an annual rate of 6.5% compounded continuously, the future value S at any…

A: Information Provided; Principal = $5000 Annual rate = 6.5% compounded continously

Q: Assume you made an investment today for $27,000 and sold it 15 years later for $75,000. What is the…

A: In this question we need to calculate CAGR i.e. Compound Annual Growth rate from given details:…

Q: A man's investment of P100,000 is expected to yield a regular income of P25,000 per year for 10…

A: Solution:- Benefit cost ratio means the ratio of present value of benefits from a project to present…

Q: An investment pays 10% interest compounded continuously. If money is invested steadily at the rate…

A: Continuous Compounding: It is the maximum limit of the compound interest if it is calculated and…

Q: What is the present value (PV) of an investment that pays $90,000 every year for four years if the…

A: The present value of an annuity is the sum of the discounted value of the periodic cash flows.…

Q: How many years will it take for P13,000.00 to become P20,000.00 if it is invested at 8% compounded…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: Suppose that $4000 is invested each quarter, for the next 10 years. What is the future worth if the…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: When will an investment of 4,000.00 double if the effective rate 8% per annum?

A: Solution : given investment P = 4,000 Effective annual rate r = 8% Amount A = 2P We know the…

Q: Net returns from an investment are estimated to be $13,000 per year for 12 years. The investment…

A: Capital investment is a long-term capital expenditure that requires huge capital for a long-term…

Q: What is the internal rate of return (IRR) of an investment that requires an initial investmen of…

A: Internal Rate of return is the rate at which the Net Present Value of the investment is zero. It can…

Q: What is the simple annual rate of return on a $10,000, 3-year investment with cash inflows of $2,000…

A: The simple annual rate of return is calculated by dividing the annual cash flow by the initial…

Q: approximately how many years would it take for an investment to grow fourfold if it were invested at…

A: Given: Rate=11%/4=0.0275Pmt =0Pv =$-1FV =$4

Q: Equipment that costs $15,000 and generates a $5,000 annual return would appear to "pay back" on the…

A: Given: Investment =$15000Annual return =$5000Inflation rate =30%

Q: The amount of $122,000 is invested todat at a rate of 8.77% per annum, with monthly compounding,…

A: Time Value of money states that a dollar today is worth more than any time in the future, this is…

Q: A financial investment equal to BRL 100,000.00 allows a withdrawal of BRL 20,000.00 in the first…

A: Investment BRL 1,00,000.00 Withdrawal BRL 20,000.00 Annual growth 2% Time Period 10…

Q: If an Investment of $5000 will grow to $8000 in four years with quarterly compounding the effective…

A: We will find the interest rate by applying the requisite formula where we can use the amount 8000…

Q: How much was initially invested if the value of the investment is at ₱200,000 after 3 and a half…

A: Present Value: It is the present worth of the investment amount, discounted at an interest rate for…

Q: How long will it take P1,000 to amount to P1,346 if invested at 6% compounded quarterly?*

A: Compound interest is when we invest the interest back and earn even more interest as a result.

Q: The in itial cost of an investment is $65,000 and thecost of capital is I 0%. The return is $ 16,000…

A: Net present value is the difference between the present value of cash flow and initial investment.

Q: What annual rate of return is earned on a $1,000 investment when it grows to $2,700 in eight years?

A: Future value is the value of assets at a future date given a growth rate. This is used for financial…

Q: An investment of P100,000 is expected to yield a regular annual net income of P25000 for 10 years.…

A: A benefit-cost ratio (BCR) is a ratio used in a cost-benefit analysis to summarize the overall…

Q: An investment of $23,500 in new equipment will generate income of $6,500 per year for 10 years. What…

A: PV of cash outflow=$23,500 Income per year=$6,500 Duration(n)=10 years As per the equation of IRR,…

Q: What is the present value of an investment in which the interest rate is 3.9% per year, compounded…

A: The time value of money is the idea that the value of money received today will be more worthy than…

Q: What interest rate, when compounded annually, is involved if an initial investment of $4000 turns…

A: Compound interest is the investment method in which the interest earned is redeposited back,…

Q: An investment costs $465 and is expected to produce cash flows of $100 at the endof each of the next…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: An investment that cost P20,000 will provide a return of 12% compounded quarterly. For how long will…

A: Investment (PV) = P20,000 Interest rate = 12% Effective annual interest rate (r) = [1+(0.12/12)]12-1…

Q: The future value of an investment is Php5,500,000 while its present value is Php3,500,000. It has a…

A: Given: Future Value “FV” = Php5,500,000 Present Value “PV” = Php3,500,000 Number of years = 13…

Q: How much was initially invested if the value of the investment is at P200,000O after 3 and a half…

A: Present value is referred to as the present worth of the investment amount which is discounted at an…

Q: Consider an investment where $45,000 is invested for 15 years at 8% compounded continuously. How…

A: Continues compounding is a limit that a compound interest can reach. It can be calculated through…

Q: What is the rate of return on an investment of $10,606 if the company will receive $2,000 each year…

A: The rate of return on an investment is the ratio of profits earned on an investment made by the…

Q: future value of an investment made 5 years ago is P150,000. If the investment offered an annual…

A: Effective rate goes on increasing if the compounding goes on increasing. And effective rate is less…

Q: The rate of return on an investment of $1500 that doubles in value over a 4-year period, and…

A: We will use the NPER formula in excel =NPER(rate, pmt,pv,-fv,type) where NPER is the number of…

Q: An investment of $30,000 is made. How long will it take to grow to $45,000 if the interest is a…

A: The investment is the allocation of money in financial instruments, property, etc. to earn the…

Q: The future value of an investment is Php5,500,000 while its present value is Php3,500,000. It has a…

A: Let the quarterly rate = r n = 13 years = 52 quarters Future value (F) = Php 5500000 Present value…

Q: The rate of return on an investment of $1500 that doubles in value over a 4-year period, and…

A: We will use the NPER formula in excel =NPER(rate, pmt,pv,-fv,type) where NPER is the number of…

Q: An investment of $50,000 in R&D results in additional revenue of $28,720 after 5 years and another…

A: Rate of return will IRR of the investment

Q: An investment costs P465 now and is expected to produce cash flows of P100 at the end of each of the…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Question

How much was initially invested if the value of the investment is at P200,000
after 3 and a half years and the investment grows by 12.5% compounded
quarterly?

An item will need replacing in 6 years from now at a cost of P128,000.00. How
much should the owner save at the beginning of each 3 months in order to
replace the old item, if his savings earn interest at 10% compounded quarterly?

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 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

The VEEtile company aims to have enough money to invest into a new grader equipment in 4 years. If the equipment will cost $250,000, how much should the company allocate now if the account earns a. 10% simple interest? b. 10% compounded semi-annually?
You anticipate an improvement on your property will require replacement in 9 years. How should rent be increased each year to cover $45,000 which you expect to cost assuming 9.7% interest?
If a new car is valued at $24,400, what will its value be in 3 years if it depreciates 12.7% each year? Round your answer to the nearest cent. if necessary.
If a down payment of P600,000 is made on a house and P80,000 a year for the next 12 years is required, what was the price of the house if money is worth 7% compounded annually?
Samuel is saving for a future renovation project that is estimated to cost $38,000. How much will Samuel have to deposit at the beginning of every three months in order to accumulate $38,000 in 6 years? Interest is 5.4% compounded quarterly. Round the answer for PMT to two decimal places. Choose BGN or END? P/Y = I/Y = PV = $ % Submit Question C/Y = PMT= $ N = FV = $
A customer would like to buy a brand-new house and lot payable monthly for 29 years. o What is the present value of the property if the monthly payment is Php 5,320 and the interest is 5.07% compounded quarterly? Round off the answer to the nearest whole number.
A house costs P500,000 cash. A purchaser will pay P100,000 cash, P50,000 at the end of 2 years and a sequence of 6 equal annual payments starting with one at the end of 4 years to discharge all his liabilities at 7% compounded annually. Find the annual payment which may be made for 6 If money is worth 5% compounded quarterly , find the future worth of a sequence of 12 semi annual payments of P1000 each, the first of which is due at the end of 4 ½
Approximately how much must be saved for retirement in order to withdraw $100,000 per year for the next 25 years if the balance earns 8% annually, and the first payment occurs one year from now? Round to the nearest dollar and show your work.
9) The maintenance cost of a car are is approximately $400 per year.With age the cost increase by $100 a year.What is the future worth of the maintenance cost in five year's time if the interest rate is 5% compounded annually?
You wish to purchase a home for $500,000. You will make payments of $30,000 at the end of every year for 30 years. The current rate of interest is 6.5% convertibly quarterly. Find the down payment that will be necessary.
It is estimated that the maintenance cost on a new car will be $350 the first year. Each subsequent year, this cost is expected to increase by $250. How much would you need to set aside when you bought a new car to pay all future maintenance costs if you planned to keep the vehicle for 15 years? Assume interest is 6% per year.
You want to save money from your businessoperation to replace a truck that has been used indelivery. The truck will be replaced after 12 yearsfrom now and the replacement cost would be about$60,000. If you earn 5% interest on your savings,how much must you deposit at the end of each yearto meet the needs?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS