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Natalija [7]
2 years ago
11

What is the present value of the following series of payments: $300 made at the end of every year starting in year 1 and ending

in year 30 EXCEPT there will be no payment of any kind at the end of year 10? Interest is 7% annual rate compounded annually.
Business
1 answer:
Ostrovityanka [42]2 years ago
3 0

Answer:

Explanation:

Annuity for 30 years is equivalent to annuity upto perpetuity.

PV = 300 / .07

= 4285.71

We shall have to deduct PV for 10 th year which is equal to

300 / (1.07)¹⁰

= 152.50

So required PV

= 4285.70 - 152.50

= 4133.2

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a. Describe how the payback period is calculated and describe the information this measure provides about a sequence of cash flo
saw5 [17]

Answer:

While taking a capital budgeting decision of source of fund, or the capital project to be chosen, we sometimes use Payback Period

It is defined as the tenure in which the cash flows will realize the cost of project, that is the period in which the entire cost will be paid back.

This provides the information regarding the time after which the project will be profitable, or the time at which it will reach break even.

The payback uses the criteria that if the payback period calculated is less than life of project it shall be accepted, in case it is equal to life of project then  there will be no profit no loss, and in case payback is higher than life of project then there will be loss.  

7 0
3 years ago
Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received y
3241004551 [841]

Answer:

$1,924,410.40

Explanation:

Calculation to determine How much money will you have on the date of your retirement 40 years from today

First step is to calculate Next year’s salary

Next year’s salary = $72,500 (1 + ..037)

Next year’s salary = $75,182.50

Second step is to calculate Next year’s deposit

Next year’s deposit = $75,182.50(.05)

Next year’s deposit = $3,759.13

Third step is to find the Present Value (PV) using this formula

PV = C{[1 / (r– g)] – [1 / (r– g)] × [(1 + g) / (1 + r)]^t}

Let plug in the formula

PV = $3,759.13{[1 / (.09 – .037)] – [1 / (.09 – .037)] × [(1 + .037) / (1 + .09)]^40}

PV = $61,268.57

Now let find the Future value (FV) using this formula

FV = PV(1 + r)^t

Let plug in the formula

FV = $61,268.57(1 + .09)^40

FV = $1,924,410.40

Therefore How much money will you have on the date of your retirement 40 years from today is $1,924,410.40

6 0
3 years ago
​____ post ratings of products and services and contribute to and edit articles in wikis
Oksanka [162]
The answer is critics
7 0
2 years ago
An individual contributes p 200 per month to a retirement account. The account earns interest at a nominal annual rate of 8% wit
amm1812

$449,866.95 is the Future value of the account after 35 yerars.

<h3>What is amount future value?</h3>
  • Future value (FV) is a term used to describe how much, at some future date and with a given interest rate, a sequence of regular payments will be worth.
  • As a result, it will show you how much you will have accumulated as of a future date if you, for instance, plan to invest a set amount each month or year.

The formula to compute the future value is shown below:

Future value = Amount (1+i)^n -1 ÷ i)

where,

Interest rate = 8% ÷ 12 months = 0.6666%

And, the number of months = 35 years × 12 months = 420

Now put this value to the above formula

F = $200 × (1 + 0.6666)^420 - 1 ÷ 0.6666%

After solving this,

Future Value: $449,866.95

N (Number of Periods) 420.000

(Interest Rate) 0.660

PMT (Periodic Deposit) $200.00

Starting Amount $0.00

Total Periodic Deposits $84,000.00

Total Interest $365,866.95

To learn more about  Future value refer,

brainly.com/question/14587551

#SPJ4

4 0
1 year ago
A 1987 advertisement in the New Yorker solicited offers on a 1967 Mercury Cougar XR7 (Motor Trend's 1967 car of the year) that h
Nadusha1986 [10]

Answer:

You can put this solution on YOUR website!

A 1987 advertisement in the New Yorker solicited offers on a 1967 Mercury Cougar XR7 (Motor Trend's 1967 car of the year) that had been stored undriven in a climate controlled environment for 20 years.

If the original owner paid $4000 for this car in 1967, what price would he have to receive in 1987 to obtain a 10 percent annual return on his investment?

---------

If the 10% is compounded yearly the price is as followed.

A(10) = 4000(1+(0.10/1))^(10*1)

---

A(10) = 4000(1.1)^10

---

A(10) = $10,374.97

======================

Cheers,

Stan H.

4 0
2 years ago
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