Draw a cash flow diagram for easy understanding. b. In the year 2020, the stock market fell because of COVID-19. You started investing from the year 2003, with an initial capital of P50,000. During this year, the bank's offer stated "Earn 3.7% interest rate, compounded quarterly for 6 years!" After 6 years, P5,000 was liquidated from the accumulated amount due to placement fees, etc. The new lump sum was further increased with the new interest rate offered by the bank and was planned to be the interest rate forever. "Earn 4% interest rate, compounded semi-annually!" However, when the pandemic surged at the end of 2020, the bank notified everyone that they will stick with the latest interest rate but will apply an inflation rate of 1.89% until the end of 2025. How much will the investor earn/lose by 2025?

Draw a cash flow diagram for easy understanding. b. In the year 2020, the stock market fell because of COVID-19. You started investing from the year 2003, with an initial capital of P50,000. During this year, the bank's offer stated "Earn 3.7% interest rate, compounded quarterly for 6 years!" After 6 years, P5,000 was liquidated from the accumulated amount due to placement fees, etc. The new lump sum was further increased with the new interest rate offered by the bank and was planned to be the interest rate forever. "Earn 4% interest rate, compounded semi-annually!" However, when the pandemic surged at the end of 2020, the bank notified everyone that they will stick with the latest interest rate but will apply an inflation rate of 1.89% until the end of 2025. How much will the investor earn/lose by 2025?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You invest in a company which expects to pay you the following amounts in return each year. Year 1: $1,100, Year 2: $2,100, Year 3: $1,600, Year 4: $2,100, and Year 5 $1,500. If an annual interest rate is 5 percent, what is the present value of this uneven cash flow stream? $7,883 $7,807 $7,563 $7,237
QI. KNOWLEDGE AND UNDERSTANDING DRAWING CASH FLOW DIAGRAM Draw the ww m mm cash flow diagram for the following : 1. Assume that you want to deposit an amount (BD120,000.00) into an account three years from now in order to be able to withdraw BD750 per year for ten years starting four years from now. Assume that the interest rate is 4.5% per year. Construct the cash flow diagram. 2. Suppose that you want to make a deposit into your account now such that you can withdraw an equal amount (A1) of BD300 per year for the first five years starting one year after your deposit and a different annual amount (A2) of BD600 per year for the following three years. With an interest rate (i) of 5.5% per year, construct the cash flow diagram. 3. If you deposit BD1,500 now, BD3,600 three years, BD2000 seven years, and BD1,800 nine years from now in a savings account that pays 10% interest, how much would you have at the end of year 25? Construct the cash flow diagram.
[1]- If a person deposits $1000 per quarter into an account at an interest rate of 12% persemiannually.a) Draw cash flow diagram, CFD?b) How much will be in the account at the end of 6 years? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
An investor is told that the following cash flow profile has a present value of $11,000 assuming that the money received at each time period is placed into an account where it earns 18% annually. For what value of X will this be true? Year Cash Flow Click here to access the TVM Factor Table calculator. $ 1 2 3 4 5 6 7 $1,300 $1,600 X X $3,000 $1,600 $400 Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±5.
Different cash flow. Given the following cash inflow at the end of each year,, what is the future value of this cash flow at 6%, 8%, and 15% interest rates at the end of year 7? What is the future value of this cash flow at 6% interest rate at the end of year 7? (Round to the nearest cent.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) $13,000 $18,000 $32,000 $0 $150,000 Year 1: Year 2: Year 3: Years 4 through 6: Year 7: Print Done I Xx
What is the value of the following cash flows in year 6? What is the value today? Assume interest rates today are 6.5%, then rates will be 6.25% for the next 4 years, 3.75% for the next 3 years, 5.3% for the next 4 years, and 3.75% thereafter. year cashflow 6 5,675 8 9,725 10 6,750 17 11,750 Must show work with formulas provided.
What lump sum would have to be deposited today into an account bearing interest of 10% per year to provide withdrawals of $1000 at 8,9,10,11 years from today? (provide cash flow diagram with solution) please provide the cash flow diagram and explain your answer.
A financial planner at Faisal Bank has offered you three possible options for receiving cash flows. You must choose the option that has the highest present value. (Option 1) PKR 1,000 now and another PKR 1,000 at the beginning of each of the 11 subsequent months during the remainder of the year, to be deposited in an account paying a 12 percent nominal annual rate, but compounded monthly (to be left on deposit for the year). (Option 2) PKR 12,750 at the end of the year (assume a 12 percent nominal interest rate with semiannual compounding). (Option 3) A payment scheme of 8 quarterly payments made over the next two years. The first payment of PKR 800 is to be made at the end of the current quarter. Payments will increase by 20 percent each quarter. The money is to be deposited in an account paying a 12 percent nominal annual rate, but compounded quarterly (to be left on deposit for the entire 2-year period).
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Assume an investor deposits S117, 000 in a professionally managed account. One year later, the account has grown in value to $132,000 and the investor withdraws S 40, 000. At the end of the second year, the account value is $92,000. No other additions or withdrawals were made. Calculate dollar-weighted return of portfolio over two years. (You need to calculate IRR of cash flows over two years. Round the answer to two decimals in percentage form. Please write % sign in the units box. Answer = 7.40%
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An investment will pay $20,900 at the end of next year for an investment of $20,000 at the start of the year. If the bank offers an interest of 2.5% over the same period, what is the net value of the decision to proceed with the investment in terms of dollars today? Hint: The net value in terms of dollars today is the net value computed at time zero. -$500 + $500 -$400 +$390 +$400 -$390

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