Find the present value of $1000 paid at the end of each month for 5 years...

Find the present value of $1000 paid at the end of each month for 5 years at 12% compounded
semi-annually

If possible, please use in terms of a financial calculator

Solutions

Expert Solution

There are 12 months in a year.

There are 2 semi-annual periods in a year.

(1 + semi annual rate)^n - 1 = (1 + monthly rate)^n - 1

(1 + 0.12/2) - 1 = (1 + monthly rate)^12 - 1

(1 + 0.06)^2 - 1 = (1 + monthly rate)^12 - 1

1.1236 - 1 = (1 + monthly rate)^12 - 1

1.1236 = (1 + monthly rate)^12

1.00976 = 1 + monthly rate

Monthly rate = 0.00976 or 0.976%

Total number of periods = 5 * 12 = 60

Present value = $45,250.54

Keys to use in a financial calculator:

PMT -1000

I/Y 0.976

N 60

CPT PV

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Find the present value of an annuity of $8000 paid at the end of each 6-month...

Find the present value of an annuity of $8000 paid at the end of each 6-month period for 4 years if the interest rate is 4%, compounded semiannually. (Round your answer to the nearest cent.) $

What is the future value of a $1000/month deposit at the end of 5 years that...

What is the future value of a $1000/month deposit at the end of 5 years that grows at a rate of $50/month, starting with your second deposit (which is $1,050). Assume that your initial deposit occurs at the end of your first month. Use 9% nominal annual interest compounded monthly. What is the value of your LAST PAYMENT of a $1000/month deposit at the end of 5 years that grows at a rate of $50/month, starting with your second deposit...

5. Present value To find the present value of a cash flow expected to be paid...

5. Present value To find the present value of a cash flow expected to be paid or received in the future, you will the future value cash flow by (1 + I)NN. What is the value today of a $12,000 cash flow expected to be received eight years from now based on an annual interest rate of 6%? $9,411 $6,023 $11,670 $7,529 Your broker called earlier today and offered you the opportunity to invest in a security. As a friend,...

Find the future value of $1,000 deposited at the end of each month for ten years...

Find the future value of $1,000 deposited at the end of each month for ten years if interest is 3.0% compounded semi-annually. Find the preset value of $4,000 due in 5 years and 6 months if money is worth 4.5% compounded quarterly. Compute the nominal annual rate of interest compounded monthly at which $200 deposited at the beginning of every three months for five years will amount to $5,000.

What is the present value of $2,000 paid at the end of each of the next...

What is the present value of $2,000 paid at the end of each of the next 84 years if the interest rate is 8% per year? Round to the nearest cent

Find the present value of $10,000 due at the end of 7 years if: (a) The...

Find the present value of $10,000 due at the end of 7 years if: (a) The nominal annual interest rate is 6% compounded semi annually. (b) The nominal annual interest rate is 4% compounded monthly.

If $1000 is deposited at the end of each year for 5 years into an ordinary...

If $1000 is deposited at the end of each year for 5 years into an ordinary annuity earning 7.59% compounded annually, construct a balance sheet showing the interest earned during each year and the balance at the end of each year. Complete the balance sheet. Period Amount Interest Balance 1 $1000.00 2 $1000.00 3 $1000.00 4 $1000.00 5 $1000.00 (Round to the nearest cent as needed.)

A young executive deposits $100 at the end of each month for 5 years into an...

A young executive deposits $100 at the end of each month for 5 years into an account that earns 6% compounded monthly. How much is in the account after the 5 years? (Round your answer to the nearest cent). $ The executive then changes the deposits in order to have a total of $400,000 after 25 total years. What should be the revised monthly payment in order to meet the $400,000 goal? (Round your answer to the nearest cent). $ ...

Raj deposits 50 into a fund at the end of each month for 5 years. The...

Raj deposits 50 into a fund at the end of each month for 5 years. The fund pays interest at an annual effective rate of i. The total amount of interest earned during the last month of year 5 is 13. Calculate the accumulated amount in Raj's account at the end of year 5 A) 3325 B) 3350 C) 3375 D) 3400 E) 3425

Find the present value of receiving $1000 per year for ten years beginning in year 12...

Find the present value of receiving $1000 per year for ten years beginning in year 12 until year 21, assuming an interest rate of 9%.

Subjects