Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help!! my assignment is due at 11pm tonight!! 1. Cal Lury owes $35,000 now. A lender will carry the debt for four more years

image text in transcribed

please help!! my assignment is due at 11pm tonight!!

image text in transcribed 1. Cal Lury owes $35,000 now. A lender will carry the debt for four more years at 10 percent interest. That is, in this particular case, the amount owed will go up by 10 percent per year for four years. The lender then will require that Cal pay off the loan over the next 12 years at 13 percent interest. What will his annual payment be? Use Appendix A and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 2. Jack Hammer invests in a stock that will pay dividends of $3.13 at the end of the first year; $3.56 at the end of the second year; and $3.99 at the end of the third year. Also, he believes that at the end of the third year he will be able to sell the stock for $63. What is the present value of all future benefits if a discount rate of 13 percent is applied? Use Appendix B for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Dividend $3.13 3.56 3.99 63.00 Total 3. Present Value $ Annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exception occurs when the annuity payments come at the beginning of each period (termed an annuity due). What is the future value of a 16-year annuity of $1,500 per period where payments come at the beginning of each period? The interest rate is 13 percent. Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods. To find the future value of an annuity due when using the Appendix tables, add 1 to n and subtract 1 from the tabular value. For example, to find the future value of a $100 payment at the beginning of each period for five periods at 10 percent, go to Appendix C for n = 6 and i = 10 percent. Look up the value of 7.716 and subtract 1 from it for an answer of 6.716 or $671.60 ($100 6.716). (Do not round intermediate calculations. Round your final answers to 2 decimal places.) 4. Phil Goode will receive $107,000 in 19 years. His friends are very jealous of him. If the funds are discounted back at a rate of 17 percent, what is the present value of his future \"pot of gold\"? Use Appendix B for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 5. What is the present value of a 6-year annuity of $1,500 per period in which payments come at the beginning of each period? The interest rate is 12 percent. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. When using Appendix D to find the present value of this annuity due, subtract 1 from n and add 1 to the table value. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 6. You invest a single amount of $16,500 for 6 years at 13 percent. At the end of 6 years you take the proceeds and invest them for 12 years at 15 percent. How much will you have after 18 years? Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management For Public Health And Not For Profit Organizations

Authors: Steven A. Finkler

2nd Edition

0131471988, 978-0131471986

More Books

Students also viewed these Finance questions

Question

Are the hours flexible or set?

Answered: 1 week ago