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- You are paying into a mutual fund that earns7% compound interest. If you are making an annualcontribution of $14,000, how much will be in thefunds in 25 years?6)Mr. Rambo wants to save for a new pickup that he expects will cost 1,900,000 four and one-halfyears from now. How much money will he have to save each year and deposit in a savings accountthat pays 6.25% per year, compounded annually, to buy the car in four and one-half years? Drawcash flow diagramHow much money would have to be placed in a sinking fund each year toreplace machine B at the end of 25 years if the fund yields 10% annualcompound interest and if the first cost of the machine is assumed toincrease at a 6% annual compound rate? (Assume the salvage value doesnot change.) Group of answer choices A. $3,600 B. $4,110 C. $2,400 D. $7,000
- Here comes an investment firm. He offers you to deposit P 2,500.00 at the endof each month for 5 years at an interest of 0.5% effective per month. How muchcan you withdraw 30 years after your last payment?A friend of yours bought a new sports car with a $5,000 down payment plus a $26,000 car loan that is financed at an interest rate of 0.25% per month for60 months. a. Calculate the required monthly loan payment on the car. b. How much does your friend still owe on the car loan immediately after she makes the 24th monthly payment? c. If, after the 24th payment, she decides to pay $300 more each month, how many months will it take her to payoff the remaining loan she owes? a) The required monthly Payment is $ (round to nearest cent) b. Your friend still owes on the car loan. (Round to the nearest dollar.) c. It will take her months. (Round-up to the nearest month)7.)A father wants to set aside money for his 5-year-old son's future college education. Money can bedeposited in a bank account that pays 8% per year, compounded annually. What equal depositsshould be made by the father, on his son's 6th through 17th birthdays, in order to provide 250,000on the son's 18th, 19th, 20th, and 21st birthdays? Draw cash flow diagram.
- Rich wants to have $25 000 in 5 years for a down payment on a house. How much should he invest today at 6.25% per annum, compounded quarterly? i = n = A = P = ? Present Value, P = A(1 + i)^ Notice the negative exponent Therefore, he should invest $ ..today.4:09 470 3 of 3 Assignment 2-2022.pdf 420 ct the cash flow diagram for A mechanical device will cost $20,000 when purchased. Maintenance will cost $1000 per year. The device will generate revenues of $5000 per year for 5 years. The salvage value is $7000. 8. Each year Exxon-Mobil expends large amounts of funds for mechanical safety features throughout its worldwide operations. Carla Ramos, a lead engineer for Mexico and Central American operations, plans expenditures of $1 million now and each of the 2 next 4 years just for the improvement of field-based pressure- release valves. Construct the cash flow diagram and find the equivalent value of these expenditures at the end of year 4, using a cost of capital estimate for safety-related funds of 12% per year. 9. An electrical engineer wants to deposit an amount P now such that she can withdraw an equal annual amount of A1 $2000 per year for the first 5 years, starting 1 year after the deposit, and a different annual withdrawal of A2 =…A wealthy business Mr. Tan wants to start a permanent fund for supporting research directedtoward sustainability. The donor Mr. Henry plans to give equal amounts of money for each of thenext 5 years plus one now, so that P100,000 per year can be withdrawn each year forever. Beginning inyear 6. If the fund earns interest at a rate of 8% per year. How much money must be donated eachtime? What would be the formula and the cashflow diagram?
- If your credit card calculates interest based on17.85% APR, compounded monthly:(a) What are your monthly interest rate and annualeffective interest rate?(b) If your current outstanding balance is $2,500 andyou skip payments for two months, what wouldbe the total balance two months from now?Are the following cash flow diagrams economically equivalent if the interest rate is 8% per year? The left-hand diagram's discounted value at the EOY 0 is __ M. Please don't use excel and please show your work.Give typing answer with explanation and conclusion Calculate the Present worth of the following cash flow. Consider 6% annual interest rate, compounded semiannually. 0=2000 1=3000 2=1000 3=1500 4=2000 5=2500 6=3000 answers... a. 48837 b.45349 c.29980 d.50736