Question

In: Finance

The future value and present value equations also help in finding the interest rate and the...


The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations.


 If a security currently worth $9,200 will be worth $12,106.57 seven years in the future, what is the implied interest rate the investor will eam on the security-assuming that no additional deposits or withdrawals are made? 

7.60% 4.00% 3.20% 1.32% 


If an investment of $50,000 is earning an interest rate of 8.00%, compounded annually, then it will take _______ for this investment to reach a value of $62,985.60-assuming that no additional deposits or withdrawals are made during this time. 


Which of the following statements is true-assuming that no additional deposits or withdrawals are made? 

It takes 14.21 years for $500 to double if invested at an annual rate of 5%. 

It takes 10.50 years for $500 to double if invested at an annual rate of 5%.

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE


Related Solutions

The future value and present value equations also help in finding the interest rate and the...
The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security currently worth $5,600 will be worth $8,228.24 five years in the future, what is the implied interest rate the investor will earn on the security-assuming that no additional deposits or withdrawals are made? 0 8.00% 0 6.40% 0 0.29% 0 6.81% If an investment of $35,000 is earning an interest...
The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations.
Finding the interest rate and the number of years The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security currently worth $12,800 will be worth $18,807.40 five years in the future, what is the implied interest rate the investor will earn on the security-assuming that no additional deposits or withdrawals are made? О 8.00% О 6.40% О 1.47% О 0.29% If an investment of $45,000...
Finding a present value is the reverse of finding a future value.
3. Present value Finding a present value is the reverse of finding a future value. _______  is the process of calculating the present value of a cash flow or a series of cash flows to be received in the future. Which of the following investments that pay will $15,000 in three years will have a lower price today? The security that earns an interest rate of 21.75% The security that carns an interest rate of 14.50% Eric wants to invest in government securities that promise to...
Finding a present value is the reverse of finding a future value. Which of the following...
Finding a present value is the reverse of finding a future value. Which of the following is true about finding the present value of cash flows? Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return. Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate...
Explain the difference between present value and future value. How can effective rate of interest be...
Explain the difference between present value and future value. How can effective rate of interest be different that the nominal or stated rate of interest? How can you tell in a word problem if the problem is calling for a future value amount or a present value amount? 4. Explain the difference between an ordinary annuity and an annuity due. Begin by explaining what an annuity is. 5.Explain how you use the ordinary annuity table to calculate an annuity "due.”...
Q1: For each of the following: Compute the Future value (FV) Present Value Years Interest rate...
Q1: For each of the following: Compute the Future value (FV) Present Value Years Interest rate Future Value $ 3,159 84,53 89,305 T 16 19 26 13% Y 9 5 Compute Present Value 15 8 13 25 7% 11 10 13 $ 17,328 41,517 7903,82 647,816 Compute the interest rate Present Value Years Interest rate Future Value $ 715 905 15,000 70,300 11 8 23 16 $ 1,381 1,718 141,832 312,815 Q2: Compute the Future value of $ 1,000 continuously...
7- Compute the present value for the following: Future Value: 140987 Years: 26 Interest rate: 11...
7- Compute the present value for the following: Future Value: 140987 Years: 26 Interest rate: 11 Provide answer with two decimals, i.e. 32.16) 8- Solve for the unknown number of years: (Use two decimals, i.e. 32.16) PV: 2,589 FV: 80,008 Rate:8% # Years: 9- Solve for the unknown number of years: (Use two decimals, i.e. 32.16) PV: 2,555 FV: 62,387 Rate:16% # Years: 10- Solve for the unknown number of years: (Use two decimals, i.e. 32.16) PV: 3,590 FV: 21,073
Question 56 Compounding is the process of finding the present value of some future amount. Select...
Question 56 Compounding is the process of finding the present value of some future amount. Select one: True False Question 57 Sales divided by net income is referred to as the profit margin. Select one: True False Question 58 This morning, Alicia bought a ten-year 9% coupon bond that pays interest semi-annually. She paid $994 for a $1,000 bond. If the market interest rate on this type of bond declines to 8.5% tonight, how much will Alicia receive for her...
Determining the present value of bonds payable Interest rates determine the present value of future amounts
  Question: Determining the present value of bonds payable Interest rates determine the present value of future amounts. (Round to the nearest dollar.) Requirements 1. Determine the present value of 10-year bonds payable with face value of $86,000 and stated interest rate of 14%, paid semiannually. The market rate of interest is 14% at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the...
what is the relationship present value and future value for a given rate of return and...
what is the relationship present value and future value for a given rate of return and time shown in the following equation: PV=FV/(1+r)t
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT