Your brother has asked you to help him with choosing an investment. He has $6,500 to...

Your brother has asked you to help him with choosing an investment. He has $6,500 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 0.0400 annually with the interest being paid quarterly. What will be the value of the investment in two years? Round to two decimal places.

Expert Solution

Value in two years is calculated using the FV function as follows:-

=FV(rate,nper,pmt,pv)

=FV(0.04/4,2*4,,-6500)

=7038.57

jeff jeffy answered 2 years ago

Your father asked for your help. He has been offered an annuitythat will pay him...

Your father asked for your help. He has been offered an annuity that will pay him $1,933 per month for 23 years. He thinks that the fair return should be 4.4%. What is the most he should be willing to pay for it today?

Your brother has asked you for a loan and has promised to payyou $7,350 at...

Your brother has asked you for a loan and has promised to pay you $7,350 at the end of three years. If you normally invest to earn 6.00 percent per year, how much will you be willing to lend to your brother if you view this purely as a financial transaction (i.e., you don’t give your brother a special deal)? (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final...

A. Your best friend has asked to assist him in making the best investment out of...

A. Your best friend has asked to assist him in making the best investment out of the following options. Which would you advise him to choose and why? SHOW WORKINGS TO JUSTIFY YOUR ANSWER. Option 1: $12,000 in 5 years’ time at 6 percent interest. Option 2: $15,000 in 2 years’ time at 9 percent interest. Option 3: $15,000 today. No strings attached. Option 4: $5,000 each year for 2 years at 7 percent interest compounded semi-annually. B. Betty Kay...

You and your brother inherited a business. You and him would like to split 50/50. Your...

You and your brother inherited a business. You and him would like to split 50/50. Your brother want to sell his half out to you in the future. He told you that he feels this will be when you turn 35 years old. Today, you just turned 22. Today the entire company is worth 500,000$. You expect the growth of 3% per year with this money invested for the next 5 years, then 5% per year for the following 8...

Your younger brother has come to you for advice. He is about to enter college and...

Your younger brother has come to you for advice. He is about to enter college and has two options open to him. His first option is to study engineering. If he does this, his undergraduate degree would cost him $30,000 a year for four years. Having obtained this, he would need to gain two years of practical experience: in the first year he would earn $35,000, in the second year he would earn $40,000. He would then need to obtain...

After reviewing the financial statements, the loan officer at the bank asked your brother whether he...

After reviewing the financial statements, the loan officer at the bank asked your brother whether he used the accrual basis of accounting for revenues and expenses. Your brother responded that he did, which is why he included an account for “Amounts Due from Customers.” The loan officer then asked whether the accounts were adjusted prior to the preparation of the statements. Your brother answered that they had not been adjusted. a. Why do you think the loan officer suspected that...

45. Your younger brother has come to you for advice. He is about to enter college...

45. Your younger brother has come to you for advice. He is about to enter college and has two options open to him. His first option is to study engineering. If he does this, his undergraduate degree would cost him $30,000 a year for four years. Having obtained this, he would need to gain two years of practical experience: in the first year he would earn $35,000, in the second year he would earn $40,000. He would then need to...

Current Attempt in Progress Incorrect answer iconYour answer is incorrect. Your brother has asked you for...

Current Attempt in Progress Incorrect answer iconYour answer is incorrect. Your brother has asked you for a loan and has promised to pay you $9,750 at the end of three years. If you normally invest to earn 5.40 percent per year, how much will you be willing to lend to your brother if you view this purely as a financial transaction (i.e., you don’t give your brother a special deal)? (If you solve this problem with algebra round intermediate calculations...

Your brother wants to borrow 10,000 from you. He has offered to pay you back $13,250...

Your brother wants to borrow 10,000 from you. He has offered to pay you back $13,250 in a year. If the cost of capital of this investment opportunity is 9% what is its NPV? Should you undertake the investment opportunity? calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. If the cost of capital of this investment opportunity is 12 % ------ What is its NPV?...

10. Your brother wants to borrow $8,000 from the Bank of Britannia and has asked if...

10. Your brother wants to borrow $8,000 from the Bank of Britannia and has asked if you would guarantee the loan. Which of the following statements is false? a. As guarantor you can use any defense against the bank that your brother could use. b. The defence of Non Est Factum (didn’t know the nature of the document being signed) is not available in the case of guarantees. c. You, as guarantor, may be relieved of your obligation if the...

Question