1. If you receive $100 in the 2nd year and $250 in the 4th year at...

1. If you receive $100 in the 2nd year and $250 in the 4th year at an interest rate of 5.5%, what is the total PV of these lump sums? ANSWER: $291.65

2. What is the PV of an investment that yields $500 to be received in 5 years and $1000 to be received in 10 years at an interest rate of 4%? ANSWER: $1086.53

(Can someone please show me how you solve this, with the steps. Also how to calculate/input it onto excel. Thank you so much! ( :

Expert Solution

PV = FV / (1+i)^n

jeff jeffy answered 2 years ago

Current 1-yr interest rate is 12%. Forward rates during 2nd, 3rd, and 4th year are 11%,...

Current 1-yr interest rate is 12%. Forward rates during 2nd, 3rd, and 4th year are 11%, 10%, and 9%, respectively. Calculate YTM for 2-yr, 3-yr, and 4-yr bond. Draw the yield curve and explain its shape using appropriate theory of term structure.

Why would you prefer to receive $100 today rather than wait and receive $100 one year...

Why would you prefer to receive $100 today rather than wait and receive $100 one year from now? Prompts: For the first part of the discussion post, list all the potential explanations you can think of for the time value of money. For each cause, write a sentence or two about how it explains your preference for money today rather than money at some future date. Let’s see how many different explanations we can uncover. For the second part of...

1. Suppose that for each of the next 10 years you will receive $250. If the...

1. Suppose that for each of the next 10 years you will receive $250. If the opportunity cost of capital is 5% how much is this stream of cash flows worth today? 2.Suppose that you deposit $450 in the bank at the end of each of the next 10 years. If the APR is 1% how much will be in your account at the end of 10 years? 3.Suppose that starting one year from now you will receive $100 a...

1. You will receive $100 per year for 10 years. The discount rate is 10%. What...

1. You will receive $100 per year for 10 years. The discount rate is 10%. What is the present value of this stream? 2. Using the previous information, assume now the 100 will increase at a 5% per year from year 1. What is the new present value? 3. Now assume compute the present value for the same information using a perpetuity without and with growth. Compare the 4 present values. What would you rank those? (Please explain step by...

Suppose you receive $100 at the end of each year for the nextthree years.What...

Suppose you receive $100 at the end of each year for the next three years.What is the future value in three years at 8% interest?

You are promised a cash flow every year forever! Next year you will receive $100. After...

You are promised a cash flow every year forever! Next year you will receive $100. After that, the payment will grow by 1% compounded annually. There is no risk associated with the payments. You can invest and earn a risk-free rate of return of 5%. What is the present value of the perpetuity?

Suppose you receive $100 at the end of each year for the next three years. a....

Suppose you receive $100 at the end of each year for the next three years. a. If the interest rate is 8% per annum (interest paid annually), what is the present value of these cash flows? b. What is the future value in three years of the present value you computed in part (a)? c. Assume that no withdrawals are made from the savings account until the end of the third year. What is the interest component? d. Compute the...

Suppose that you will receive $5,000 in year 1, $5,000 in year 2, $5,000 in year...

Suppose that you will receive $5,000 in year 1, $5,000 in year 2, $5,000 in year 3 and $7,000 in year 5. And somehow you know that the present value for the whole cash stream is $23,071.30. At a 7% discount rate, the cash flow received in year 4 will be ــــــــــــــــــــــــــــ. Select one: a. $6,500 b. $7,200 c. $7,000 d. $6,800

Suppose that you will receive $5,000 in year 1, $5,000 in year 2, $5,000 in year...

Suppose that you will receive $5,000 in year 1, $5,000 in year 2, $5,000 in year 3 and $7,000 in year 5. And somehow you know that the present value for the whole cash stream is $23,071.30. At a 7% discount rate, the cash flow received in year 4 will be ــــــــــــــــــــــــــــ. Select one: a. $7,000 b. $7,200 c. $6,500 d. $6,800

If you expect to receive $100 in one year from now, $200 two years from now,...

If you expect to receive $100 in one year from now, $200 two years from now, and $150 three years from now, How much this cash flow is worth today if the interest rate is 10%

Question

1. If you receive $100 in the 2nd year and $250 in the 4th year at...

Solutions

Expert Solution

Related Solutions

Current 1-yr interest rate is 12%. Forward rates during 2nd, 3rd, and 4th year are 11%,...

Why would you prefer to receive $100 today rather than wait and receive $100 one year...

1. Suppose that for each of the next 10 years you will receive $250. If the...

1. You will receive $100 per year for 10 years. The discount rate is 10%. What...

Suppose you receive $100 at the end of each year for the nextthree years.What...

You are promised a cash flow every year forever! Next year you will receive $100. After...

Suppose you receive $100 at the end of each year for the next three years. a....

Suppose that you will receive $5,000 in year 1, $5,000 in year 2, $5,000 in year...

Suppose that you will receive $5,000 in year 1, $5,000 in year 2, $5,000 in year...

If you expect to receive $100 in one year from now, $200 two years from now,...