12. A company has agreed to pay $4.2 million in 6 years to settle a lawsuit. How much must it invest in an account paying 6%annual interest compounded monthly to have that amount when it is due?What is the interest rate per period?TM(Type an integer or decimal rounded to four decimal places as needed.)Section5.2The company should invest $[(Do not round until the final answer. Then round to the nearest dollar as needed. Use the answer from the previous step tofind this answer.)

Future value required = $4,200,000 Interest rate = 6% Number of compounding per year = 12 Period= 6…

12. A company has agreed to pay $4.2 million in 6 years to settle a lawsuit. How much must it invest in an account paying 6% annual interest compounded monthly to have that amount when it is due? What is the interest rate per period? IM (Type an integer or decimal rounded to four decimal places as needed.) Section 5.2 The company should invest $ (Do not round until the final answer. Then round to the nearest dollar as needed. Use the answer from the previous step to find this answer.)

12. A company has agreed to pay $4.2 million in 6 years to settle a lawsuit. How much must it invest in an account paying 6% annual interest compounded monthly to have that amount when it is due? What is the interest rate per period? IM (Type an integer or decimal rounded to four decimal places as needed.) Section 5.2 The company should invest $ (Do not round until the final answer. Then round to the nearest dollar as needed. Use the answer from the previous step to find this answer.)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 3STP

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3. Suppose $100 was deposited in 2022 into an account that earns 5% interest, compounded annually. At the end of what year would it first be possible to withdraw $350? Show any work; partial credit might not be awarded in the absence of mnemonic notation [e.g., F(P/F, i, n)].
4a. Suppose two $100 withdrawals are made, the first in 2022 and the second in 2026, emptying an account that earns 5% interest, compounded annually. What amount was deposited when the account was originally opened in 2020? Show any work; partial credit might not be awarded in the absence of mnemonic notation [e.g., F(P/F, i, n)].
A bank lends some money to a business. The business will pay the bank a single payment of $184,000 in ten years time. How much greater is the present value (PV) of this payment if the interest rate is 9% rather than 8%? A. $10,506 B. $9,005 C. $6,003 D. $7,504
Suppose a company borrowed $1 million at a rate of 9% simple interest, with interestpaid at the end of each month. The bank uses a 360-day year. How much interestwould the firm have to pay in a 30-day month? What would the interest be if thebank used a 365-day year? [(0.09/360) (30) ($1,000,000) 5 $7,500 interest for themonth. For the 365-day year, (0.09/365)(30)($1,000,000) 5 $7,397.26 of interest.The use of a 360-day year raises the interest cost by $102.74, which is whybanks like to use it on loans.]
A bank lends some money to a business. The business will pay the bank a single payment of $180,000 in ten years time. How much greater is the present value (PV) of this payment if the interest rate is 6% rather than 5%? A. $11,992 B. $7,995 C. $9,993 Your answer is correct. D. $13,991
A bank lends some money to a business. The business will pay the bank a single payment of $180,000 in ten years time. How much greater is the present value (PV) of this payment if the interest rate is 8% rather than 7%? A. $9,754 B. $6,502 C. $11,379 D. $8,128 Please use financial calculater variable entries.
4c. Originally, the depositor intended to make two $100 withdrawals, the first in 2022 and the second in 2026, emptying an account that earns 5% interest, compounded annually. Now, suppose the depositor changes their mind (again) and instead decides to empty the account with a single withdrawal in 2029. What is the withdrawal amount that would empty the account? (The original data must be used; that is, the answers to (4a-b) may only be used to verify the answer to this question.) Light not he awarded in the absence of mnemonic notation [e.g., F(P/F, i, n)]. lit
2. A bank loan of P6,000,000 charged at 9.65% pa compounded quarterly , is to be paid in 10 equal annual payments, the first of which to be paid 12 months from now. How much does Mr. Eden still owe to the bank after he has made the 9th payment? Select the correct response: O . P1,211,510 O P887,702.15 O P1,864,174.52 O P1,452,040
6. Q5: Suppose that you would like to borrow £75000 loan from a bank to establish a new business. You wish to repay it monthly over 10 years. The current interest rate is 7%. What is the monthly payment to pay-off the loan assuming that interest rate remains the same over 10 years? 708.81 3 780.81 3 870.81 3 807.81 3
11. If $10,000 is invested today in an account of Faisal Islamic Bank of Egypt that earns interest at a rate of 12.5%, what is the value of the equal withdrawals that can be taken out of the account at the end of each of the next six years if the investor plans to deplete the account at the end of the time period? A. $2,466. B. $2,604. C. $2,750. 12. An investor is to receive a 15-year, $8,000 annuity, with the first payment to be received today. At an 11% discount rate, this annuity's worth today is closest to: A. $55,855. B. $57,527. C.$63,855.
Suppose a bank has the following Balance Sheet Assets Liabilities RSA = 120 RSL = 90 FRL = X FRA = 110 (Fixed rate liabilities can be found if needed by determining what number it must be to balance the balance sheet.) Suppose all the Assets and Liabilities were set last year when the interest rate was 10, if the interest rate has changed by 2% since that time what is the current cost from all of the bank's liabilities? Your Answer:
Q1. A $200,000 loan amortized over 14 years at an interest rate of 10% per year requires payments of $21,215.85 to completely remove the loan when interest is charged on the unrecovered balance of the principal. If interest is charged on the original principal instead of the unrecovered balance, what is the loan balance after 14 years provided the same $21,215.85 payments are made each year? The loan balance is $ .