Question: Find the following Values using the equations , then by a financial calculator. Compounding / discounting occurs annually. a. An initial $600 compounded for 1

  1. Find the following Values using the equations, then by a financial calculator. Compounding / discounting occurs annually.

a. An initial $600 compounded for 1 year at 6%.

b. An initial $600 compounded for 2 years at 6%.

c. The present value of $600 due in 1 year at a discount rate of 6%.

d. The present value of $600 due in 2 years at a discount rate of 6%.

2. Find the present values of these ordinary annuities. Discounting occurs once a year.

a. $600 per year for 12 years at 8%.

b. $300 per year for 6 years at 4%.

c.$500 per year for 6 years at 0%.

3. What is the present value of a $600 perpetuity if the interest rate is 5%? If interest rates doubled to 10%, what would its present value be?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

An investment will pay $50 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 11%...

Q:

Need help with these discussion postings (in a document) and assignments (all in separate files), all directions are included as well. FINANCE DIRECTIONS Need to provide 1 original post substantial...

Q:

I have 14 questions for finance homework that i need help with! Effective interest rate You borrow $155,000; the annual loan payments are $8,963.67 for 30 years. What interest rate are you being...

Q:

Present and Future values for different periods, find the following values using the equations and then a financial calculator. (Compounding/ discounting occurs annualy) a)an initial $500 compounded...

Q:

5-1 FUTURE VALUE If you deposit $2,000 in a bank account that pays 6% interest annually, how much will be in your account after 5 years? 5-7 PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An...

Q:

I have 15 questions for a finance homework assignment that i need help with! please help !! An investment will pay $50 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the...

Q:

eBook You have $4,851.59 in a brokerage account, and you plan to deposit an additional $4,000 at the end of every future year until your account totals $210,000. You expect to earn 14% annually on...

Q:

1. FUTURE VALUE If you deposit $5,000 in a bank account that pays 8% interest annually, how much will be in your account after 5 years? Round your answer to the nearest cent. 2. PRESENT VALUE What is...

Q:

5-1 What is an opportunity cost? How is this concept used in TVM analysis, and where is it shown on a time line? Is a single number used in all situations? Explain. 5-2 Explain whether the following...

Q:

5-1 FUTURE VALUE If you deposit $2,000 in a bank account that pays 6% interest annually how much will be in your account after 5 years? 5-7 PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An...

Q:

What happens when your CEO wants to remove the tip structure from your restaurant? Do you complain about the new prices as a customer? Do you worry about your paychecks as a server? Danny Meyer, CEO...

Q:

What roles do service, replacement parts, and standards play in competition in foreign marketing? Illustrate.

Q:

possible A particular country's exports of goods are increasing exponentially. The value of the exports, t years after 2 0 0 7 , can be approximated by V ( t ) = 1 . 8 e 0 . 0 4 1 t where t = 0...

Q:

Your broker offers to sell you some shares of Bahnsen & Co. common stock that paid a dividend of $2.00 yesterday. Bahnsens dividend is expected to grow at 5% per year for the next 3 years. If you buy...

Q:

Name five common major classes of operating cash receipts or operating cash payments presented on the statement of cash flows when the cash flows from operating activities are reported by the direct...

Q:

If salaries payable was $100,000 at the beginning of the year and $75,000 at the end of the year, should $25,000 decrease be added to or deducted from income to determine the amount of cash flows...

Q:

A gas mixture contains 10.0 mole% H 2 O (v) and 90.0 mole% N 2 . The gas temperature and absolute pressure at the start of each of the three parts of this problem are 50C and 500 mm Hg. Ideal gas...

Q:

Microtech Corporation is expanding rapidly. Because it needs to retain all of its earnings, it does not currently pay any dividends. Investors expect Microtech to begin paying dividends eventually,...

Q:

Design a minimum-mass symmetric three-bar truss (the area of member 1 and that of member 3 are the same) to support a load P, as was shown in Fig. 2.9. The following notation may be used: Pu = P cos...

Q:

Pew. Pew Research Center publishes polls on important issues in news and about global life at its website, www.pewglobal.org. In a survey summary, you can find the information as below: Country:...

Q:

Global warming. The Gallup Poll interviewed 1,022 randomly selected U.S. adults aged 18 and older, March 710, 2013. Gallup reports that when asked whether respondents thought that global warming was...

Q:

Defining the survey. At its website (www.gallup.com) the Gallup World Poll reports results of surveys conducted in various places around the world. At the end of one of these reports about the...