Interest is compounded semi-annually

Assignment Help Finance Basics
Reference no: EM13835432

1. Today, you are purchasing a $3,741 4-year car loan at 7 percent. You will pay annually at the end of each year. What is the amount of each payment?

2. What is the future value of $4,195 invested for 14 years at 13% if interest is compounded semi-annually (twice a year)? 

3. Barrett Pharmaceuticals is considering a drug project that costs $176,677 today and is expected to generate end-of-year annual cash flows of $13,721, forever. At what discount rate would Barrett be indifferent between accepting and rejecting the project? 

4. How many years it will take you to double your money if you can earn 11% each year, given that compounding is quarterly? 

5. What is the future value of $3,533 invested for 5 years at 13% if interest is compounded quarterly? 

6. How much do you need to invest today in order to have $10,891 at the end of 15 years if you are sure to earn an interest at the rate of 5%? 

7. Consider a 10-year loan with monthly payments at 10%. If the loan amount is $250,000, compute the Interest paid during the 6th year. 

8. What is the future value of annual payments of $3,598 for 19 years at 5 percent? 

9. Assume interest rate of 7%. Suppose that you receive $110,007 at the end of each year for 4 years. Suppose that this cash flow starts at the end of the fourth year. Compute the present value. 

10. The ABC Company is considering a new project which will require an initial cash investment of $17,248. The projected cash flows for years 1 through 4 are $7,945, $8,617, $9,024, and $5,467, respectively. If the appropriate discount rate is 4%, compute the NPV of the project.

11. If you receive $451 at the end of each year for the first three years and $574 at the end of each year for the next three years. What is the present value? Assume interest rate is 11%. 

12. What should you be willing to pay in order to receive $687 annually forever, if you require 11% per year on the investment? 

13. What is the future value of $7,514 for 12 years at 7 percent if interest is compounded semi-annually? 

14. Kelly starting setting aside funds 4 years ago to buy some new equipment for her firm. She has saved $3,645 each quarter and earned an average rate of return of 8 percent. How much money does she currently have saved for this purpose? 

15. How many years it will take to grow your money from $4,569 to $6,111 if you can earn an interest of 8% compounded monthly? 

16. What is the effective rate of 13% compounded monthly? 

17. If you can triple your money in 23 years, what is the implied rate of interest? 

18. In order to buy a house, you take a loan of 100,000 at 7.5% for a period of 13 years. Compute the balance remaining at the end of 5 years. 

19. Gertrude Carter and Co. has an outstanding loan that calls for equal annual payments of $14,903 over the 10-year life of the loan. The original loan amount was $100,000 at an APR of 8 percent. How much of the third payment is interest? 

20. If you can double your money in 23 years, what is the implied annual rate of interest, given that compounded semi-annually?

21. If you can double your money in 29 years, what is the implied annual rate of interest, given that compounded in quarterly? 

22. Say, you deposit $1,557 in a bank for 18 years. What is the amount you will have in the bank at the end of 18 years if interest of 8 % for first 7 years and interest of 8 % for the remaining years? 

23. What is the future value of quarterly payments of $806 for 19 years at 6 percent? 

24. If you put $700 in a savings account with a 10% nominal rate of interest compounded monthly, what will the investment be worth in 21 months? 

25. How many months it will take to grow your money from $3,863 to $6,218 if you can earn an interest of 11% compounded monthly? 

26. If the effective rate is 9%. What is the nominal rate if compounding is daily. 

27. The Perpetual Life Insurance Co is trying to sell you an investment policy that will pay you and your heirs $11,076 per year forever. Suppose the Perpetual Life Insurance Co. told you the policy costs $191,925. At what interest rate would this be a fair deal? 

28. Assume interest rate of 9%. A company receives cash flows of $928 at the end of year 5, $226 at the end of year 7, and $592 at the end of year 10. Compute the future value of this cash flow stream. 

29. The ABC Company is considering a new project which will require an initial cash investment of $5,523. The project will produce no cash flows for the first 5 years. The projected cash flows for years 6 through9 are $5,492, $5,502, $5,113, and $3,132, respectively. If the appropriate discount rate is 7%, compute the NPV of the project. 

30. Assume interest rate of 8%. A company receives cash flows of $88,910 at the end of years 4, 5, 6, 7, and 8, and cash flows of $244,648 at the end of year 10. Compute the future value of this cash flow stream.

31. What is the future value of $1,094 invested for 4 years at 16% if interest is compounded semi-annually? 

32. How many years it will take to grow your money from $4,615 to $6,725 if you can earn an interest of 13% compounded quarterly? 

33. How much do you need to invest today in order to have $6,515 at the end of 14 years if you are sure to earn an interest at the rate of 15%, if interest is compounded monthly? 

34.How many years it will take you to quadruple (means 4 times) your money if you can earn 11.86% each year? 

35.How much do you need to invest today in order to have $320 at the end of 10 years if you are sure to earn an interest at the rate of 13%, if interest is compounded quarterly? 

36.Say, you deposit $4,382 in a bank for 16 years. What is the amount you will have in the bank at the end of 16 years if interest of 5 % compounded monthly for first 7 years and interest of 8 % compounded quarterly for the remaining years?

Reference no: EM13835432

Questions Cloud

Examples of burial art to that of the ancient egyptians : Examples of burial art to that of the Ancient Egyptians
Discuss planning strategies for the annual community : In a 1-page internal memo, invite a small team of fellow employees to a strategic planning meeting to discuss planning strategies for the annual community outreach festival
Write an essay describing a private security agency : Pick a private security agency ( Premises, Business, Retail, Loss Prevention, Personal Security, Employment-Related Security, Information and Computer, or Investigative Security; i.e. Pinkerton Agency, Wal-Mart Loss Prevention, DynCorp, etc...) and w..
Compare the balanced score card with six sigma : Compare the balanced score card with six sigma. Which is better and why? Why are you writing this report? What is the question you are trying to answer? An executive summary and a good literature review.
Interest is compounded semi-annually : 1. Today, you are purchasing a $3,741 4-year car loan at 7 percent. You will pay annually at the end of each year. What is the amount of each payment? 2. What is the future value of $4,195 invested for 14 years at 13% if interest is compounded semi-a..
Deliver a lecture and dinner speech at your annual festival : Write a proposal letter of 1-2 pages to a respected community figure asking him or her to deliver a lecture and dinner speech at your annual festival
Difference between articulation and pronunciation : Normal 0 false false false EN-US X-NONE X-NONE difference between articulation..
Determine the maximum instantaneous power : Find the Fourier series coefficients an, bn and a0 - Determine the maximum instantaneous power, the average power over the 12 minutes cycle and the electric energy converter to heat in each 12 minutes cycl

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What is the project discounted payback

Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback?

  How much did the bank pay sue for the note

Peter buys an item from Sue and signs a note to pay $300 in 10months. Then, 1 month(s) before the note comes due, Sue sells thenote to a bank which discounts the note based on 12.5% simpleinterest. How much did the bank pay Sue for the note?

  Draw and submit a time line

Draw and submit a time line, including EBIT, taxes, depreciation, operating cash flow, tvm factors, and discounted cash flow.

  Write down the major components of the bond briefly

what are the major components of a bond? briefly explain each one. suppose you are contemplating purchasing rmi common

  Evaluate forrester proposed relaxation of credit standards

Show all necessary calculations required to evaluate Forrester's proposed relaxation of credit standards.

  Forecasted interest expense on balance of debt

Suppose that all extra debt in the form of the line of credit is added at the ending of year that means that you must base forecasted interest expense on balance of debt at the commencement of year.

  Determine the times- interest- earned ratio

Determine the times- interest- earned ratio for each probability. What is the probability of not covering the interest payment at the 30% debt level?

  Determining rights offering

What are the earnings per share and price-earning ratio before new shares are sold via the rights offering?

  Compute the value of a bond

1. What factors are used to compute the value of a bond? Indicate how much each factor contributes to the calculated value. 2. How is the value of a typical corporate bond determined? Which formulas are used to determine the value? 3. Why would a bon..

  What is the effective borrowing cost

What is the APR on this loan? c) What is the effective borrowing cost if the borrower anticipates paying off the loan at the end of five years?

  What is the optimal capital budget

Project A has a cost of $50 million and an IRR of 14%; project B has a cost of $70 million and an IRR of 16%; and project C has a cost of $35 million and an IRR of 6%. What is the Optimal Capital Budget?

  Currently 5 year t-notes provide a yield to maturity

Currently 5 year T-notes provide a yield to maturity of 1.74% per year. At the same time, TIPS (Treasury Inflation Protected Securities) with a 5 year maturity provide a yield (before inflation) of -0.50% per year. What is the implied annua..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd