What is the embedded interest rate offered by the bank

Assignment Help Financial Management
Reference no: EM13873631

1) Suppose you have an option to invest $15,000 for the next 25 years in an account that earns 5% per annum or investment 15,000 in a scheme that returns 3x your investment after 25 years. Which option would you choose?

2) A bank offers an investment opportunity, which requires you to invest 10,000 today and the bank promises to return 15,000 in 10 years. What is the embedded interest rate offered by the bank?

3) You require $500,000 at the end of your retirement, which is 25 years from now. Assume you have no cash balance in the account which offers an interest rate of 4%. How much should save every month?

4) You lease a land to a bank that promises to pay you 72,000 per year and increase the rent by a fixed rate of 1.5% every year for next 5 years. What is the value of rental income that you expect to generate? Appropriate discount rate is 3%.

5) Your father is about to retire, and he wants to buy an annuity that will provide him with $85,000 of income a year for 20 years, with the first payment coming immediately. The going rate on such annuities is 5.15%. How much would it cost him to buy the annuity today?

Reference no: EM13873631

Questions Cloud

Describe three key project management concepts you believe : Create a paper (2 pages maximum) describing three key project management concepts you believe had the most significant impact on the success of this effort.
Example of a business process : For your second posting, choose an example of such a conflict posted by another student, and suggest a way that the business process can be changed so that the interests of the stakeholders can be brought into sync.
Explain why an owner would decide to rent a server : Explain why an owner would decide to rent a server for an e-business site. Give an example of a situation in which a rented server would be the best option
Economic state probability return : Compute the expected return given these three economic states, their likelihoods, and the potential returns: (2 points) Economic State Probability Return
What is the embedded interest rate offered by the bank : A bank offers an investment opportunity, which requires you to invest 10,000 today and the bank promises to return 15,000 in 10 years. What is the embedded interest rate offered by the bank? You require $500,000 at the end of your retirement, which i..
Baseboard resistance heater : A room is heated by a baseboard resistance heater. When the heat losses from the room on a winter day amount to 6500 kJ/h, the air temperature in the room remains constant even though the heater operates continuously. Determine the power rating of..
Develop at least one meaningful performance measure : Develop at least one meaningful performance measure (metric) - Identify at least one expected level of performance.
Summarize-data collection methods : Is the problem significant to nursing and health care? How will it generate or refine knowledge in nursing practice and Was the review of background literature provided?
Target stock price in dollars : Fly Away, Inc., has balance sheet equity of $5.6 million. At the same time, the income statement shows net income of $823,200. The company paid dividends of $452,760 and has 200,000 shares of stock outstanding. If the benchmark PE ratio is 23, what i..

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd