Question
In: Finance
Today, you invest $7,000 in an investment that will pay $14,000in 11 years. What is...
Today, you invest $7,000 in an investment that will pay $14,000 in 11 years. What is the implied rate of interest?
Solutions
Expert Solution
The rate of interest is computed as follows:
= (Amount in 11 years / Today's Investment) 1 / n - 1
= ($ 14,000 / $ 7,000) 1 / 11 - 1
= 2 1 / 11 - 1
= 2 0.09090909 - 1
= 6.50% Approximately
jeff jeffy answered 2 years agoRelated Solutions
Today, you invest $3,000 in an investment that will pay $6,000 in 7 years. What is...
Today, you invest $3,000 in an investment that will pay $6,000
in 7 years. What is the implied rate of interest?
Calculate the future value in four years of $7,000 received today if your investments pay (Do...
Calculate the future value in four years of $7,000 received
today if your investments pay (Do not round intermediate
calculations. Round your answers to 2 decimal places. (e.g.,
32.16)) Future Value a. 5 percent compounded annually $ b. 7
percent compounded annually c. 9 percent compounded annually d. 9
percent compounded semiannually e. 9 percent compounded
quarterly
What is the most you are willing to pay today for an investment that would return...
What is the most you are willing to pay today for an
investment that would return $300 1 year from today?
$300
2 years from today,
$300 3 years from today,
$300 4 years from today,
$300 5 years from today,
$300 6 years from today,
$300
7 years from today,
$300 8 years from today,
$300 9 years from today,
$300 10 years from today,
$300
11 years from...
You are considering a project that costs $500 to invest in today, and will pay you...
You are considering a project that costs $500 to invest in
today, and will pay you $100 next year, $50 in two years, and $100
in three years. The cash inflow will grow at a constant rate of 3%
per year after year 3, and you will receive cash inflows for 25
years (total including the first three CFs). Your discount rate is
14%. What is the NPV of the project? Also, what would the NPV be if
the cash...
You are considering a project that costs $500 to invest in today, and will pay you...
You are considering a project that costs $500 to invest in
today, and will pay you $100 next year. The cash inflow will grow
at a constant rate of 3% per year after year 1, and you will
receive cash inflows for 20 years (total including the first year
CF). Your discount rate is 16%. What is the NPV of the project?
Also, what would the NPV be if the cash inflows continued forever?
Show your work.
You make a $7,000 deposit to an investment account today. The investment earns 6% p.a compounding...
You make a $7,000 deposit to an investment account today. The
investment earns 6% p.a compounding monthly for the first 12
months, then it earns 13%p.a compounding monthly for the next 3
years. At the end of the 4 years the balance in the account is (to
the nearest whole dollar; don't use $ sign or commas)
Investment A will return to you $2,089 in one year if you invest $1,750 today. Investment...
Investment A will return to you $2,089 in one year if you invest
$1,750 today. Investment B will return to you $3,168 in one year.
What is the most you will pay for Investment B? Round to the
dollar.
You are considering a project that costs $500 to invest in today, and will pay you $100 next year, $50 in two years, and $100 in three years.
You are considering a project that costs $500 to invest in today, and will pay you $100 next year, $50 in two years, and $100 in three years. The cash inflow will grow at a constant rate of 3% per year after year 3, and you will receive cash inflows for 25 years (total including the first three CFs). Your discount rate is 14%. What is the NPV of the project? Also, what would the NPV be if the cash...
You are considering a project that costs $500 to invest in today, and will pay you $100 next year, $50 in two years, and $100 in three years.
You are considering a project that costs $500 to invest in today, and will pay you $100 next year, $50 in two years, and $100 in three years. The cash inflow will grow at a constant rate of 3% per year after year 3, and you will receive cash inflows for 25 years (total including the first three CFs). Your discount rate is 14%. What is the NPV of the project? Also, what would the NPV be if the...
You decide to save $7,000 at the end of each year for the next 11 years....
You decide to save $7,000 at the end of each year for the next
11 years. If your savings earn an annual interest rate of 4%, how
much will you have saved up by the end of 11 years? Round to the
nearest cent.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In EXCEL: The motion picture industry is a competitive business. More than 60 studios produce a...
- select any two (2) short-essay topics from the list below. 1. How are information systems transforming...
- Three liquid mixtures, with compositions listed in the table are mixed to produce a single mixture....
- A Tesco case study Introduction Tesco is a customer-orientated business. It aims to offer products that...
- a) AFN equation Broussard Skateboard's sales are expected to increase by 25% from $7.2 million in...
- Reorganize the following list of cations in the order of strongest to the weakest potential for...
- Macropoland is currently experiencing a recession--consumption and investment are very sluggish, and unemployment is quite high...
ADVERTISEMENT