6. Given a six (6) percent interest rate per year, compute the year seven (7) future...

6. Given a six (6) percent interest rate per year, compute the year seven (7) future value at year end if deposits of $1,000 and $1,500 are made at end of years two (2) and three (3) respectively, and a withdrawal of $500 is made at end of year five (5).

Group of answer choices

A. $5,918.91

B. $3,201.48

C. $2,992.04

D. $2,500.00

E. $2,670.14

Solutions

Expert Solution

Calculate future value of deposits at end of seven year
Future value	Amount deposits*((1+r)^n)
Year	Future value
2	$1,338.23	1000*(1.06^5)
3	$1,893.72	1500*(1.06^4)
5	-$561.80	-500*(1.06^2)
Future value	$2,670.14

Thus, future value at end of seventh year would be $2,670.14

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Compute the future value at the end of year five (5) of a $2,000 deposit at the end of year one (1) and another $2,000 deposit at the end of year two (2) using a seven (7) percent interest rate per year.

Compute the future value at the end of year five (5) of a $2,000 deposit at the end of year one (1) and another $2,000 deposit at the end of year two (2) using a seven (7) percent interest rate per year.Group of answer choicesA. $5,071.68B. $2,805.10C. $5,426.70D. $4,739.89E. $2,621.59

1. Suppose the interest rate on 6-month treasury bills is 7 percent per year in the...

1. Suppose the interest rate on 6-month treasury bills is 7 percent per year in the United Kingdom and 4 percent per year in the United States. Also, today’s spot exchange price of the pound is $2.00 while the 6month forward exchange price of the pound is $1.98. If the price of the 6-month forward pound were to _____, U.S. investors would be indifferent between covered U.K. investment and domestic U.S. investment under exact CD. a. rise to $1.990 b....

What is the future value of a $500 annuity payment over seven (7) years if interest rates are nine (9) percent per year?

What is the future value of a $500 annuity payment over seven (7) years if interest rates are nine (9) percent per year?Group of answer choicesA. $3,761.67B. $5,514.24C. $4,600.22D. $4,494.44E. $6,200.91

If 38,300 dollars is invested at an interest rate of 7 percent per year, find the...

If 38,300 dollars is invested at an interest rate of 7 percent per year, find the interest earned for the investment at the end of 5 years for the following compounding methods. (a) Annual: (b) Semiannual: (c) Monthly: (d) Daily:

Given an interest rate of 6.95 percent per year, what is the value at Year 9...

Given an interest rate of 6.95 percent per year, what is the value at Year 9 of a perpetual stream $3,700 payments that begin at Year 20? (Do not round intermediate calculations and round your answer to 2 decimal places , e.g., 32.16.)

Compute the present value of a $1,000 deposit at end of year two (2) and another $2,000 deposit at the end of year five (5) if interest rates are seven (7) percent per year.

Compute the present value of a $1,000 deposit at end of year two (2) and another $2,000 deposit at the end of year five (5) if interest rates are seven (7) percent per year.Group of answer choicesA. $2,632.60B. $1,525.79C. $934.58D. $2,299.41E. $2,460.37

6. Assume the annual interest rate on a $500,000 7-year balloon mortgage is 6 percent. Payments...

6. Assume the annual interest rate on a $500,000 7-year balloon mortgage is 6 percent. Payments will be made monthly based on a 30-year amortization schedule. f. What will be the remaining mortgage balance on the new 4.5 percent loan at the end of year 7 (four years after refinancing)? g. What will be the difference in the remaining mortgage balances at the end of year 7 (four years after refinancing)? h. At the end of year 3 (beginning of...

Given an interest rate of 6% per year compounded annually, what is the value at the...

Given an interest rate of 6% per year compounded annually, what is the value at the date t = 0 of a perpetual stream of $2,000 annual payments that begin at date t = 10? (approx. to nearest integer value) Select one: a. $19730 b. $20914 c. $18613 d. $18000

Given an interest rate of 9.5 percent per year, what is the value at date t...

Given an interest rate of 9.5 percent per year, what is the value at date t = 5 of a perpetual stream of $900 payments with the first payment at date t = 15? A.4102.21 B. 9573.68 C. 4269.96 D. 4185.933 E.3822.77

Compute the future worth of alternative P shown below, using an interest rate of 8% per...

Compute the future worth of alternative P shown below, using an interest rate of 8% per year using LCM method P Q First cost, $ -23,000 -30,000 Annual operating cost, $ per year -4,000 -2,500 Salvage value, $ 3,000 1,000 Life, years 3 6

Subjects