+1-415-670-9189
info@expertsmind.com
What annual interest rate is required to accumulate
Course:- Finance Basics
Reference No.:- EM13298346




Assignment Help
Assignment Help >> Finance Basics

Consider the surgery centers' goal of having @200,000 available in five years to buy a new Patient billing system.
a. What lump sum amount must be invested today in a CD paying 10 percent annual interest to accumulate the needed $200,000?
b. What annual interest rate is needed to produce $200,000 after five years if only $100,000 is invested?

Now consider a second alternative for accumulating funds to buy the new billing system.In lieu of lump sum investment, assume that five annual payments of $32,000 are made at the end of each year

a.What type of annuity is this?

b.What is the present value of this annuity if the payments are invested in n account that pays 10 percent interest annually? 10 percent compounded annually?

c. What is the future value of this annuity if the payments are invested in an account that pays 10 percebt interest annually? 10 percent compounded semi annually?

d. What annual interest rate is required to accumulate the $200,000 needed to make the purchase , assuming a $32,000 annual payment?

e.What size annual payment is needed to accumulate $200,000 under annual compounding at a 10 percent interest rate?

f. Suppose the payments are only $16,000 each, but they are made every six ,months, starting six months from now.What will the future value be if the 10 payments were invested at 10 percent annual interest? If invested at Banksouthat 10 compounded semi annually?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Conduct research online regarding the various types of information systems that are used to support e-business and e-commerce. Discuss the differences between customer relat
Louis Nicosia operates four 7 to 11 stores. He has just received the monthly bank statement at October 31 from City National Bank, and the statement shows an ending balance of
Pick a product that you thought did not have a feasible business idea but has proven to be successful or somewhat successful. Then, speculate what the entrepreneur and his o
1. Explain how economic transactions between household savers of funds and corporate users of funds would occur in a world without financial institutions.2. Identify and expla
An automobile company, Nissan, as temporary cash surplus and lends its funds overnight through a repurchase agreement to a government securities dealer, earning $55,600 in int
what will be the length of its cash conversion cycle and its working capital financing requirement if the new production process is implemented? Round your answers to two de
Calculate the prices of the bond and the share of common stock, assuming the risk-free interest rate is .10 per year and the risk-adjusted rate of return on the stock is .13
Thomas Brothers is expected to pay a $0.50 per share dividend at the end of the year (i.e., D1 = $0.50). The dividend is expected to grow at a constant rate of 7 percent a yea