What is the lump sum equivalent today of $300 received at the end of each of the

Question

What is the lump sum equivalent today of $300 received at the end of each of the nxt 30 years at 4% compounded annually?

What is the APY of 4% compounded daily assuming there are 365 days in a year?

You borrow $100,000 at an interest rate of 12% compounded semiannually on January 1st, 2005. The loan terminates on December 31st, 2008. The loan terms call for interest payments every six months (at the end of each period) for the next 3 years and repayment of principal at maturity. What will be your cash outflow each period during the life of the loan?

What is the lump sum equivalent today of $300 received at the end of each of the nxt 30 years at 4% compounded annually?

What is the APY of 4% compounded daily assuming there are 365 days in a year?

You borrow $100,000 at an interest rate of 12% compounded semiannually on January 1st, 2005. The loan terminates on December 31st, 2008. The loan terms call for interest payments every six months (at the end of each period) for the next 3 years and repayment of principal at maturity. What will be your cash outflow each period during the life of the loan?

Explanation / Answer

Present value of $ 300 = 300 x (1/1.04)^30 = 92.50 formula for APY = (1+ r/(n*100))^n Where r =rate of interest = 4% n=365 days Therefore APY = (1+4/(365*100))^365 - 1 =(1.00011)^365-1 =1.040808-1 = 0.040808 Hence APY = 4.08% Semiannual Payment Receipt Date Beginning Interest Cashflows 31-Dec-05 100000 12000 6000 100000 -94000 31-Dec-06 100000 12000 6000 6000 31-Dec-07 100000 12000 6000 6000 31-Dec-08 100000 12000 112000 112000

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.