Question

In: Finance

End of year two, sami withdrew 3200 dollars, and he deposited 2100 dollars end of year three. compute the last two payments.

sami is planning on buying a car after five years. the current price of the car is 50,000 dollars and inflation rate is 3 percent. sami currently has 11,000 dollars in a bank account that pays an annual interest rate of 8 percent, compounded semi-annually. he wants to save for the balance by making semi annual payments in the account, at the end of each period. 1.compute the amount of the payments

End of year two, sami withdrew 3200 dollars, and he deposited 2100 dollars end of year three. compute the last two payments.

Solutions

Expert Solution

1)$2801.265

Current Value of Car 50000.00
Inflation 3%
Money In Hand 11000
Bank Interest 8% 4.00%
Year 0 1 2 3 4 5 6
Car Value 50000.00 51500.00 53045.00 54636.35 56275.44 57963.70 59702.61
Periods 0 1 2 3 4 5 6 7 8 9 10 11 12
CF 11000.00 14241.27 17612.18 21117.93 24763.92 28555.74 32499.23 36600.47 40865.75 45301.64 49914.97 54712.84 59702.62
Interest Earned 0.00 440 569.65 704.49 844.72 990.56 1142.23 1299.97 1464.02 1634.63 1812.07 1996.60 2188.51
Semiannual Payments 0 2801.265 2801.265 2801.265 2801.265 2801.265 2801.265 2801.265 2801.265 2801.265 2801.265 2801.265 2801.265
Annual Payments 2801.265

2) $2915.88

0 1 2 3 4 5 6 7 8 9 10 11 12
CF 11000.00 14355.89 17846.01 21475.73 22050.64 25848.56 31898.38 36090.20 40449.70 44983.57 49698.80 54602.63 59702.62
Interest Earned 0.00 440 574.24 713.84 859.03 882.03 1033.94 1275.94 1443.61 1617.99 1799.34 1987.95 2184.11
Semiannual Payments 0 2915.885 2915.885 2915.885 2915.885 2915.885 2915.885 2915.885 2915.885 2915.885 2915.885 2915.885 2915.885
Annual Payments 2915.885

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Charles deposited $12,000 in the bank. He withdrew $5000 from his account after one year. If...
Charles deposited $12,000 in the bank. He withdrew $5000 from his account after one year. If he receives a total amount of $9340 after 3 years, find the rate of simple interest.
Bob is a movie start earning millions of dollars last year as an actor. He is...
Bob is a movie start earning millions of dollars last year as an actor. He is also a 40% active owner in a nightclub business. He participates in the management and whenever he is available Bob performs playing clarinet at the club once a weekend. Last year (2019) the nightclub earned $100,000 after paying all bills including paying the owners fair compensation for their services. However the nightclub did not pay any of this income out to the owners. What...
Consider a $5,000,000, 9%, 25-year mortgage with monthly payments. Compute the first three payments and the...
Consider a $5,000,000, 9%, 25-year mortgage with monthly payments. Compute the first three payments and the loan balance after the third payment for each of the following loan types: (a) Interest-only, (b) CAM, (c) CPM.
John Lyons has undergone treatment for kidney stones three times in the last year. Today he...
John Lyons has undergone treatment for kidney stones three times in the last year. Today he calls this primary provider with complaints of acute, excruciating, colicky, pain that radiates down the thigh toward the genitalia. The pain started last night, and has become progressively more severe. He also complains of the urge to void but has little urine output, and it is blood tinged. Due to the pain, he has not taken any fluids or food in 24 hours. Mr....
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
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
Currency appreciation: Consider price of beer. Let's pretend that last year a bottle of beer used to cost one dollar, but this year it costs two dollars per bottle.
1)         Currency appreciation: Consider price of beer. Let's pretend that last year a bottle of beer used to cost one dollar, but this year it costs two dollars per bottle.                        a)         This means beer costs twice as much as last year; or beer price has gone up by ___________%                        b)         One dollar buys half as much beer as last year; or dollar has fallen in value by ___________%            Note: The same idea works for relative values of currencies, i.e. appreciation...
Quick-To-Change Company has decided to computerize its accounting system. The company has two alternatives that both entail the use of a computer. It can lease a computer under a three year contract in which the lease payments will be $4,500 each year, p
Quick-To-Change Company has decided to computerize its accounting system. The company has two alternatives that both entail the use of a computer.It can lease a computer under a three year contract in which the lease payments will be $4,500 each year, payable at the beginning of each year. The lessor will provide all repairs and maintenance under this arrangement.   It can purchase the computer outright for $11,600 in cash. In this case, they will incur the following repair and maintenance...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT