Question: help using calculator if possible 1. Present Value and Multiple Cash Flows Investment X offers to pay you $2000 per year for ten years, whereas

help using calculator if possible help using calculator if possible 1. Present Value and Multiple Cash Flows

1. Present Value and Multiple Cash Flows Investment X offers to pay you $2000 per year for ten years, whereas Investment Y offers to pay you $6,000 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 per cent? If the discount rate is 25 per cent? a. PV of 2,000 for 10 years at 5% = $ Points 2.5 b. PV of 6,000 for 5 years at 5% = $ Points 2.5 Points 2.5 c. PV of 2,000 for 10 years at 25% =$ d. PV of 6,000 for 5 years at 25% = $ Points 2.5 2. Calculating Annuity Values You want to have $75,000 in your savings account six years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 7.1 per cent interest, what amount must you deposit each year? $ Points 10 3. Calculating Annuity Values Vanzan Bank offers you a $61,000, nine year term loan at 13% annual interest. What will your annual loan payment be? $ Points 10 4. Calculating EAR Last National Bank charges 13.2 percent compounded monthly on its business loans. First Diversified Bank charges 13.5 percent compounded semiannually. As a potential borrower. which bank would you go to for a new loan? a. Effective rate of 13.2 percent compounded monthly = % Points: 5 b. Effective rate of 13.5 percent compounded semiannually = Points: 5 % 5. Calculating APR Calzon Credit Corp. wants to earn an effective annual return on its consumer loans of 18 percent per year. The bank uses daily compounding on its loans. What interest rate is the bank required by law to report to potential borrowers? % Points: 10

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