What is the present value of a perpetuity

Assignment Help Finance Basics
Reference no: EM132799669

1. How much would $5.00 grow at 6% after 20 years? $16.04

2. What is the present value of a perpetuity, that pays $100,000,000 per year, beginning one year from now with an interest rate of 10%?

3. A borrower agrees to repay an investor $2,000 in five years. Assuming a 6% interest rate, what is the value of the bond today?

4. The present value of an investment today is $585.43. The investment matures in 10 years and it was agreed the investor would be paid $1,000. What is the interest rate the investor is expected to earn?

5. You plan a purchasing a home in 5 years. Assuming you save $2,500 each year for a down payment, you plan to earn 4% interest and you will deposit the funds at the end of each year. How much will you have after 5 years?

6. You inherit $100,000 and invest the inheritance at 7% each year. What would be the withdrawal at the end of the next 10 years and end with a zero balance?

Reference no: EM132799669

Questions Cloud

What are the goals of monetary policy : What are the goals of monetary policy? Develop in particular the interest-rate stability goal.
Calculate the company ending fixed asset value : Given this information, calculate the company's ending fixed asset value. Show calculations in detail.
Describe the organization and its significance to nurses : Describe the organization and its significance to nurses in the specialty area. Include its purpose, mission, and vision. Describe the overall benefits.
What is the risk-neutral probability : Suppose S = $100, s = 30% per annum, r = 2% per annum (continuously compounded), and d = 3% per annum (continuous). What is the risk-neutral probability
What is the present value of a perpetuity : What is the present value of a perpetuity, that pays $100,000,000 per year, beginning one year from now with an interest rate of 10%?
What is the value of the bond today : 1. A borrower agrees to repay an investor $2,000 in five years. Assuming a 6% interest rate, what is the value of the bond today?
Firm after-tax component cost of debt : The firm's marginal tax rate is 40%. What's the firm's after-tax component cost of debt?
What are the characteristics of a successful venture capital : Listen to Episode 12 - of Innovation fuel pod-cast: A road to successful venture capital. What are the characteristics of a successful venture capital
How has public opinion influenced government action : How has public opinion influenced government action addressing the opioid epidemic. What current federal and state legislation has been enacted or is being.

Reviews

Write a Review

Finance Basics Questions & Answers

  Computation of cost of equity and weighted average cost

Computation of cost of equity and weighted average cost of capital (WACC) and what conclusions can you draw from your results from Parts

  Discuss the ways a realistic budget will benefit the owner

Briefly discuss the ways a realistic budget will benefit the owner of Babycakes versus having no budget at all. Be sure to use Babycakes as the company and any specific product details in your explanation.

  This is the final part which has a spread sheet regarding

this is the final part which has a spread sheet regarding trend analysis with indexes of at minimum of 5 different

  What is the value of the stock

a. If the required return for Superior is 21 percent, what is the value of the stock?

  Think about the art of negotiation

Think about the art of negotiation when it comes to accepting a job offer. What are the most important things to you during

  What were your dollar return and percent last year

Conglomco stock ended last year at $77.24. If you owned 200 shares of Conglomc stock, what were your dollar return and percent last year?

  Discuss why your selected concepts are important

Identify and define up to three concepts associated with making capital investment decisions such as cash flows, sunk costs, opportunity costs, or others. Discuss why your selected concepts are important for the investor to factor into the decisio..

  It may surprise you that there are cash flows associated

it may surprise you that there are cash flows associated with holding a job.nbsp using the examples provided in chapter

  Calculate the future value at retirement for karls schedule

Calculate the future value at retirement for Karl' s Schedule C Income. Karl's annual Schedule C income is $64,000 and he expects to retire at age 62. Karl

  What is the price of 1 million ounces of gold produced in

suppose the current price of gold is 280 per ounce. hotshot consultants advises you that gold prices will increase at

  Why must working capital be managed

1. why must working capital be "managed"? 2. what is(are) the goal(s) of working capital management? 3. create an example and explain the cash budget

  Assume that the following ratios are constant what is the

assume that the following ratios are constant.total asset turnover2.50profit margin7.8equity multiplier1.80payout

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