Question

Could someone answer all of the question, cus I dont have the remaining

6. Use the tables for the following problem.

Polly wants to buy her first home in five years. She will need $15,000 as a down payment. Polly just won some money on a gambling boat. Her savings account, which is compounded quarterly, earns an annual rate of 8%. How much should Polly set aside now out of her winnings to have enough for her down payment?

Table ________________

Row _________________

Column (rate) _________

Factor _______________

Present Value ___________

7. Anderson Bank and Trust is advertising five year loans at a 7.8% APR with monthly payments. What is the effective annual rate on this loan? _______________

8. Dalton just bought a certificate of deposit at his bank and the rate printed on the front is 4.9%. Dalton knows that inflation is running at 2.25%.

What is the APPROXIMATE real rate Dalton is getting? ________________

What is the EXACT real rate Dalton is getting? _________________

9. Nancy’s Antiques, Inc. just added a whole new line of furniture to her product line. Nancy expects this addition to result in record high dividends of $4.00 and $4.50 in the next two years. After that, she thinks her growth will level off at its usual 4.5% rate. The rate expected in the marketplace for investments similar to Nancy’s is 6%.

What is the current value of a share of Nancy’s? ______________

What will the value of a share be in year two (P_{2})?
______________

What will the value of a share be in year twelve
(P_{12})? ______________

Answer #1

6)

Number of periods = 5 * 4 = 20

Rate = 0.08 / 4 = 0.02 or 2%

Future value = present value ( 1 + r)^{t}

15,000 = Present value( 1 + 0.02)^{20}

15,000 = Present value * 1.485947

**Present value = $10,094.57**

7)

Effective annual rate = ( 1 + 0.078/12)^{12} - 1

Effective annual rate = ( 1 + 0.0065)^{12} - 1

Effective annual rate = 1.08085 - 1

**Effective annual rate = 0.08085 or 8.085%**

8)

**Approxomate real rate = 4.9% - 2.25% =
2.65%**

Exact real rate = [( 1 + nominal return) / ( 1 + inflation rate)] - 1

Exact real rate = [( 1 + 0.049) / ( 1 + 0.025)] - 1

Exact real rate = [ 1.049 / 1.025] - 1

**Exact real rate =0.023415 or 2.3415%**

PLEASE ANSWER ALL, I am unable to post individually.
Dont not answer, and request to post the remaining separately.
Thank you !
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please answer all questions and i will rate thumb up :)
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PLEASE ANSWER ALL, I am unable to post individually.
Do NOT answer, If you are not going to complete all, and or request
to post the remaining separately. Thank you !
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I have solved the problem up to number 6. all my answers
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Thank you
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