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An investment will pay 100 at the end of each of the next 3 years 200 at the end of Year 4 300 at the end of Year 5 and 500 and the end of Year 6 if you earn 8 what is the present value?
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∙ 14y ago
Financial Management exercise questions.
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∙ 14y ago
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When an investment of 3500 earns simple interest at a rate of 2.3 per quarter for 3 years. Calculate the accumulated value at the end of the three year period.?
$3749.29
What is the present value of 16000 in 5 years at 12 percent?
9078.83 At the end of the first year, 9078.83 @ 12% growth will become 10168.29 end of 2nd year, 10168.29 becomes 11388.48 end of 3rd year, 11388.48 becomes 12755.10 end of 4th year, 12755.10 becomes 14285.71 end of 5th year, 14285.71 becomes 16000 Of course, you can use 'present value' tables, which give a reasonably accurate approximation, but they lack the precision of the actual calculation. The figure can also be calculated by using logarithms. For present value tables. see Related links below this box
How many years will it take for an investment to double if the interest rate is 8 percent per year compounded annually?
11 years
What is the present value of 3 year annuity of 100 if discount rate is 6%?
The formula for the present value of an annuity due. The present value of an annuity due is used to derive the current value of a series of cash payments that are expected to be made on predetermined future dates and in predetermined amounts.
What is the present value of 100 to be received at the end of two years if the discount rate is 12 percent?
If it's 12% per year, compounded annually, then it is: 100 * (1 + 0.12)-2 = 79.72
What is the meaning of the term net present value?
Net Present Value (NPV) means the difference between the present value of the future cash flows from an investment and the amount of investment.Present value of the expected cash flows is computed by discounting them at the required rate of return. For example, an investment of $1,000 today at 10 percent will yield $1,100 at the end of the year; therefore, the present value of $1,100 at the desired rate of return (10 percent) is $1,000. The amount of investment ($1,000 in this example) is deducted from this figure to arrive at net present value which here is zero ($1,000-$1,000).A zero net present value means the project repays original investment plus the required rate of return. A positive net present value means a better return, and a negative net present value means a worse return.
what an investment company offers an investment fund that grows at 20% per year. How many years will it take for an investment to triple in value, what would be the answer rounded to the nearest hundredth?
20.00
How do you calculate how much an investment is worth in a number of years?
That depends on what you are given about the rate of growth in value. If you are given a constant yield of r per year (r being a percentage like 0.05 for 5% annual yield), every year the value is multiplied by r + 1. In n years your investment will be worth the initial investment times (r + 1)n
Jean will receive 8500 per year for 15 years if a 7 percent interest rate is applied what is the current value of the future payments?
If based on the present value of annuities Taking a factor of 9.1 Present value of the 15 years annuities is approx $76,506
What is the difference between investment and net investment?
"Net investment" deducts depreciation from gross investment. Net fixed investment is the value of the net increase in the capital stock per year.
Any premium or discount on a long-term debt investment is amortized?
Yes, at the end of the year you take the difference between the interest revenue gained and what would have been gained if the investment had the present value interest. For a discount, the difference will be credited against the discount received.
When an investment of 3500 earns simple interest at a rate of 2.3 per quarter for 3 years. Calculate the accumulated value at the end of the three year period.?
$3749.29
What is the present value in excel?
Present value is a financial term and is the result of discounting future amounts to the present. For example, a cash amount of $10,000 received at the end of 5 years will have a present value of $6,209.21 if the future amount is discounted at 10% compounded annually. Excel provides a function called PV for calculating the Present Value. For the example given, it would be as follows: =PV(10%,5,0,-10000) That is 10% over 5 years, with no payments at the end of year with value owed being 10,000.
What is the present value of 5000 received in two years if the interest rate is 7 percent?
Assuming interest is compounded annually, the present value is 5,000 divided by 1.072 .07 is the intererst rate. The exponent is the number of years (2). So the answer is 4,367.20. After the first year, the value is 4367.20 x 1.07 = 4,672.90 Then, at the end of the second year: 4,672.90 x 1.07 = 5,000
What doed a negative IRR mean?
That you are loosing value on the investment at that rate per year.
What is the Impact of inflation in return on investment?
Calculating the return on investment you actually want to know whether the investment will give you positive value in the end. You wouldn't want to waste your money, right? Thus you want to make sure that the net present value of your investment is positive. However, inflation deteriorates the value of money. 100 money today most likely can buy you more today than in a year's time. That's why you are interested in adjusting the expected future cashflows to the expected inflation rate. Overall, not accounting for inflation will overestimate the value of investment. In other words, you could choose something which will not bring you benefit.
Concept of time value of money?
Time Value of Money is the value of money taking into account the effects of interest. For Example 100 Currency Units in the future (Future Value) at 5% interest Results in a Present Value Factor of 1/1.05= 0.95238 (After 1 Year) 0.95238/1.05= 0.90703 (After 2 Years) 0.90703/1.05= 0.86384 (After 3 Years) And so on.... Thus in order to get 100 Cu in the future you must invest 1 year = 95.24 Cu (Present Value) 2 years= 90.70 Cu (PV) 3 years= 86.38 Cu (PV) And so on...
