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- 1. If you borrow money from your friend with simple interest of 12%. Find the present worth of 20,000 which is due at the end of nine months? 2. A Loan of 10,000 is made for a period of (m) months at simple interest of 20%. If the future amount is due at the end of the load period is 4,166. Determine the (m) ? 3. The investmest made by John proved most remunerative. His 1,000,000 savings doubled at 2% per 6 months after (n) years. Determine the (n) ? 4. An investors holds a time payment purchase contact on some machine tools. The contact calls for the payments of 6,800 at the end of each month a 5 years period. The 1st payment is due in one month. He offers to sell you the contact for 330,680 cash today. If you otherwise can make 1% per month on your money, would you accept or reject the investors office?Rich wants to have $25 000 in 5 years for a down payment on a house. How much should he invest today at 6.25% per annum, compounded quarterly? i = n = A = P = ? Present Value, P = A(1 + i)^ Notice the negative exponent Therefore, he should invest $ ..today.For the following cash flows, using Excel, compute: a) the present worth. b) the equivalent uniform annual worth c) draw a cash flow diagram (chart) of the annuities. 1) 3) ND. 60 0- 60 0 1 2 3 4 60 60 i = 10% Year Disbursements Receipts $4400 660 660 440 220 60 $0 880 1980 2420 1760 120 2) 4) 0 200 220 i 15% 242 50 266.20 120 A i = 10% 50 A 6 120 50 120
- A sum of $10,000 now (time 0) is equlvalent to the following cash flow diagram. What is the value of SB if the annual interest rate is 6%? $3,300 $B $2,400 $2,400 3 4. End of Year The value of SB is $3294 (Round to the nearest dollar.)Investment Analysis The effective rate of interest can be calculated using the formula reff m (1)" - 1 where r is the effective rate of interest, r is the nominal interest rate per year, and m is the number of conversion periods per year. Find the nominal interest rate that, when compounded monthly, yields an effective interest rate of 3%/year. (Round your answer to two decimal places.) eff 3.04 × %A friend of yours bought a new sports car with a $5,000 down payment plus a $26,000 car loan that is financed at an interest rate of 0.25% per month for60 months. a. Calculate the required monthly loan payment on the car. b. How much does your friend still owe on the car loan immediately after she makes the 24th monthly payment? c. If, after the 24th payment, she decides to pay $300 more each month, how many months will it take her to payoff the remaining loan she owes? a) The required monthly Payment is $ (round to nearest cent) b. Your friend still owes on the car loan. (Round to the nearest dollar.) c. It will take her months. (Round-up to the nearest month)
- 1. An electric utility investment has a capital cost of S60 million, a term of 8 years, and an annuity of $16 million. What is the CRF for this investment?If you opened an account on Year 0 with the amount shown and you deposit and withdraw the following amounts at the end of each year, how much money will be there at the end of 3 years in the account. The bank pays interest as shown. Rate Year Deposit Withdrawl 5% 0 $27,000 0 1 $6,000 $ (4,000.00) 2 $4,500 $ (13,500.00) 3 $7,000 $ (5,000.00)If your credit card calculates interest based on17.85% APR, compounded monthly:(a) What are your monthly interest rate and annualeffective interest rate?(b) If your current outstanding balance is $2,500 andyou skip payments for two months, what wouldbe the total balance two months from now?
- 12. Compare the accumulated amount after 5 yrs of P1,000 invested at the rate of 10% compounded a. Annually; b. Semi-annually; c. Quarterly; d. Monthly; e. Daily; and f. Continuously.1.Find the present value of $20800 in 4 months at 12% simple interest. a)$200 b)$200,000 c)$2000 d)$20000 2.The simple interest on a $6500 loan at 15% for 9 months is. a)$731.25 b)$7312.50 c)$73.13 d)$2925 3. If we deposit $5000 in an account that pays 9% per year. Find the amount of simple interest earned during 8 months. a)$3000 b)$300 c)$360 d)$3600 4.The simple interest charged on a loan amount of $8500 for 2 years was $1275. What rate of interest was charged a)22.5% b)3.75% c)15% d)7.5% 5.What rate of simple interest will make a principal double itself in 6 years. a)16.67% b)8.33% c)33.33% d)4.16% 6.Find the present value of $20800 in 4 months at 12% simple interest. a)$200 b)$200,000 c)$2000 d)$20000allie has won a lottery that pays her $135,000 at the end of this year and increases by 11.25% per year thereafter for 26 years. leon has offered allie $ 2,500,000 today in exchange for all the money she will receive. if gail can get 13% per year compounded every 6 months. a. determine the present worth of the lottery winnings. b. does leon offer a good deal? (yes/no) c. what is the future worth of the better deal?