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What will be the present value of 1000 received at the end of year 3 and then every two years after that. Using an interest rate of 18 percent per year?
Wiki User
∙ 13y ago
It looks like there is no end date, so that means that 2 years of interest generate 1000: F3 * 1.182 - F3 = 1000 ; F3 = 2548.42, Then calculate the present value from F3:
F3 = 2548.42 = P * (1.18)3 --> P = 1551.05
Wiki User
∙ 13y ago
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Using the rule of 72 how long will take for a deposit to double size using an interest rate of 9 percent?
72/9 ie 8 years
How long will money in savings take to double at 5 percent interest compounded annually?
Use the "rule of 72"...simply put, using compound interest you take the number 72 and divide it by the interest rate. Thus, at 5% the time to double is 14.4 years. This formula can be used for calculating a "double" for any interest rate using the same mathematical procedure.
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What is the interest on 1200 invested for 2 years in an account that earns 5 percent interest per year?
The answer, assuming compounding once per year and using generic monetary units (MUs), is MU123. In the first year, MU1,200 earning 5% generates MU60 of interest. The MU60 earned the first year is added to the original MU1,200, allowing us to earn interest on MU1,260 in the second year. MU1,260 earning 5% generates MU63. So, MU60 + MU63 is equal to MU123. The answers will be different assuming different compounding periods as follows: Compounding Period Two Years of Interest No compounding MU120.00 Yearly compounding MU123.00 Six-month compounding MU124.58 Quarterly compounding MU125.38 Monthly compounding MU125.93 Daily compounding MU126.20 Continuous compounding MU126.21
Calculate the amount of interest on a loan of 3200 at 6 percent interest for 60 days using the ordinary interest method?
32
What is the amount of interest on a loan of 3200 at 6 percent interest for 60 days using the ordinary interest method?
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What is advantage of using BLOG?
As per my experience you can present your interest through blog and earn money.
Using the Rule of 72 how long will it take for a deposit to double in size using an interest rate of 9 percent?
8 years.
Why the calculation of present value is important in decision making?
When calculating any return on investment or the amount to be spent on a project, you have to do the calculation using the present value of any spending or income to be received, in order to calculate it without the effect of interest or any other event that might effect the inflow or outflow. Only by using the present value of the amounts do you have common ground to compare the options or to calculate the true value of the income.
Using the rule of 72 how long will take for a deposit to double size using an interest rate of 9 percent?
72/9 ie 8 years
What is the difference between compounding and discounting?
Compounding finds the future value of a present value using a compound interest rate. Discounting finds the present value of some future value, using a discount rate. They are inverse relationships. This is perhaps best illustrated by demonstrating that a present value of some future sum is the amount which, if compounded using the same interest rate and time period, results in a future value of the very same amount.
What is the total present value of 80 received in one year 300 received in two years and 700 received in six years if the discount rate is 7?
$3304.85The basic problem can be broken down like this: First find the PV of the sum of $80 that is received in year 1. Using interest factor (1yr @7%) tables found in most finance text books that will be $74.80 ($80*0.935)Next you need to find the PV of annuity for two years of $300 @7%. Using interest factors this will be $542.20 ($300*1.808). But this is the PV at year 1 since the payments started in Year 2. Now you need to convert this PV to year 0 by using the interest factor for a sum for one year and multiplying $542.20 by this factor (0.935). This will give a result of $507.14Finally you need to find the PV of annuity for six years of $700 @7%. Using the interest factors this will be $3336.90 ($700*4.767). But this is the PV at year 3, so you will need to convert this to PV @ year 0 buy multiplying this # by the interest factor for the PV of a sum for 3 yrs @7% (0.816) to get $2722.91Now you add the three results together to get the present value @ year 0: $74.80 + $507.14 + $2722.91 to get the answer of $3304.85
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How to calculate PVIFA, or Present Value Interest Factor of an Annuity, depends on your particular financial calculator. In general, you input the information you have using the Present Value function and the calculator will use factor tables to generate an answer.
How long will money in savings take to double at 5 percent interest compounded annually?
Use the "rule of 72"...simply put, using compound interest you take the number 72 and divide it by the interest rate. Thus, at 5% the time to double is 14.4 years. This formula can be used for calculating a "double" for any interest rate using the same mathematical procedure.
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Accreud interst is interst payable that has not been paid yet: Double entry: Debit : Say Laon Interest Account Credit: Interest Payable Account Accrued Interest: This is the interest which we have earned but not yet received. Example: If there is a contract that we will receive the interest on money landed to somebody of $ 1200 at the end of the year then after 1 month we have earned the interest of $ 100 but not yet received so we will show that $ 100 in the asset side of balance sheet as accrued interest. The above is Accrued Interest Income. Similarly, you can have Accrued Interest Expense. So, using the above example, if you were the borrower, at the end of the first month you would debit Interest Expense for $100 and credit a liability account called Accrued Interest.
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Yes, you can campare mortgage rates using the present value calculator. you can also check compound interest, present value, return rate / CAGR, annuity, present value of annuity, bond yield and retirement.
