A project get continuous stream of income with constant rate of $100 per annum from t=0 to t=4, t is time measured in years. The force of interest is 5% for the first 5 years. For the years thereafter, the effective discount rate is 1%. What is the accumulation value at time 8?
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A project get continuous stream of income with constant rate of $100 per annum from t=0 to t=4, t is time measured in years.
The force of interest is 5% for the first 5 years. For the years thereafter, the effective discount rate is 1%. What is the accumulation value at time 8?
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- Complete the following using present value. Amount desired $8,900, Time 4 years, Rate 6%, Compounded monthly. What is the period used? What is the rate? What PV factor is used? What is the PV of amount desired at end of period?a. What single investment made today, earning 10 % annual interest, will be worth 10,000 TL at the end of 3 years ? b. What is the present value of 10,000 TL to be received at the end of 3 years if the discount rate is 20 % ? mwww ww w ww mIf money is invested at 6% per year, after approximately how many years will the interest earned be equal to the original investment?
- 7. Find the IRR of an investment of 50,000 ETB, whose receipts in the next four years are ETB 15,000, ETB 15,00o0, ETB 20,000 and ETB 20,000 respectively. Is the investment viable if the minimum attractive rate of return (MARR) is 10% per annual?Assume that time is measured in years and that interest rates are constant. A cashflow of amount £1000 is paid each year, with the first payment made at time 1 and the last payment made at time 20. Using a constant effective interest rate of 3% per annum, calculate the present value at time 0 of the cashflows.Investment A will earn 0.5% per month. Investment B will earn 6% per year. Which investment will have the higher future value in 5 years? Select one: a. B b. A=B c. A
- Consider an initial investment of $100 using an accumulation function which is a second-degree polynomial. You are given that the future values of this investment at the end of six months and the first year are $120 and $150, respectively. Determine the present value of 100$ which is paid at time -15.When an initial amount of P dollars is invested at r% annual interest compounded n times per year, the value of the account (4) after years is given by the equation nt A=P(1 + =)** n Write an equation that represents the value in an account that starts out with an initial investment of $5000 and pays 10% interest compound monthly. Then use that equation to fill the table and use the table to graph the equation. Years (1) Value (4) 0 5 10 15 20 oo → KIInvestment If $5000 is invested for 6 years atinterest rate r (as a decimal), compounded annually, the future value of the investment is given byS = 5000(1 + r) 6dollars.a. Find the future value of this investment for selectedinterest rates by completing the following table. b. Graph this function for 0 <= r <= 0.20.c. Compute the future value if the rate is 10% and20%. How much more money is earned at 20%?
- what is the internal rate of return of $10,000 investment that yields an annual benefit of $2,400 for 5 years?Consider an investment of $X. Suppose that you are able to earn 10% a year on your investment rather than 5% per year over 7 years. At the end of those 7 years, how much extra interest (compared to the original 5%) will you have earned on the investment?An investment pays $4,000 per year at the beginning of each year for the next 4 years and then $6,000 per year at the beginning of each year for the next 6 years. Using a discount rate of 8%, what is the GPV of these payments?