Question

what is the value of an investment that pays you $500 today, with subsequent annual amounts...

what is the value of an investment that pays you $500 today, with subsequent annual amounts that increase by 5% each year for 6 years (a total of 7 payments)? he interest rate is 9% per year

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

EXCEL FORMULA:

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Find the present value of a 20-year annuity with annual payments which pays $600 today and...
Find the present value of a 20-year annuity with annual payments which pays $600 today and each subsequent payment is 5% greater than the preceding payment. The annual effective rate of interest is 10.25%. Answer: 7851.19 Please show which equations you used and please do not use excel to answer this question.
Calculate the present value of $500 annual investment for 5 years at 6% effective annual rate...
Calculate the present value of $500 annual investment for 5 years at 6% effective annual rate of return. if investment is done at the end of each year if investment is done at the beginning of each year
An investment pays out $20,000 at the end of the year, followed by payments of $30,000,...
An investment pays out $20,000 at the end of the year, followed by payments of $30,000, $40,000, and $50,000 at the end of the subsequent years. Yields in the market are expected to steadily increase. The discount rate for the first year is 6%, for the second year is 7%, for the third year is 8%, and for the fourth year is $9%. How much would you be willing to pay for this investment? Please show all calculations in excel!
You are trying to value the following investment opportunity: The investment will cost you $23,670 today....
You are trying to value the following investment opportunity: The investment will cost you $23,670 today. In exchange for your investment you will receive monthly cash payments of $5,050 for 9 months. The first payment will occur at the end of the first month. The applicable effective annual interest rate for this investment opportunity is 7%. Calculate the NPV of this investment opportunity. Round to two decimals (do not include the $-sign in your answer).
What is the present value of $10,000 to be received 10 years from today, assuming a...
What is the present value of $10,000 to be received 10 years from today, assuming a 6 percent annual interest (discount) rate?   2. If you deposit $3,000 in a bank account that pays 4 percent annual interest, what would your account balance equal after 9 years?   3. To settle a wrongful death case, a judge ordered the maker of a defective product to pay the spouse of the deceased person $100,000 today, $150,000 four years from today, and $250,000 eight...
You can purchase an investment that pays $5,000 at the end of each year for twenty...
You can purchase an investment that pays $5,000 at the end of each year for twenty years. The investment pays a 3% annual interest rate. How much should you pay for the investment today?
You can buy a $500 savings bond today for $250 and redeem the bond in 10...
You can buy a $500 savings bond today for $250 and redeem the bond in 10 years for its full face value of $500. You could also invest in a money market account that pays 7% interest per year. Which option is better, assuming they are of equal risk? a The money market account is better because it pays more interest. b The money market account is better because it requires a smaller investment. c The savings bond is better...
An investor pays $10,000 today to purchase an investment that returns $5,000 at the end of...
An investor pays $10,000 today to purchase an investment that returns $5,000 at the end of each of years 2, 4, and 5. The returns are immediately reinvested at an annual interest rate of 5%. Calculate the annual effective yield rate for the investor at the end of the fifth year. (a) 9.91% (b) 12.00% (c) 12.45% (d) 13.11% (e) 15.13%
You have been offered an investment that pays $500 at the end of every 6 months...
You have been offered an investment that pays $500 at the end of every 6 months for the next 3 years. The nominal interest rate is 12 percent; however, interest is compounded quarterly. What is the present value of the investment? 1. $2,458.66 $2,444.67 $2,451.73 $2,463.33 $2,437.56
You are valuing an investment that will pay you $24,000 per year for the first 6...
You are valuing an investment that will pay you $24,000 per year for the first 6 years, $28,000 per year for the next 10 years, and $54,000 per year the following 14 years (all payments are at the end of each year). If the appropriate annual discount rate is 6.00%, what is the value of the investment to you today?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT