Business, 10.09.2019 23:20 ayshajabeenmeox5jrh

An investment pays you $100 at the end of each of the next 3 years. the investment will then pay you $200 at the end of year 4, $300 at the end of year 5, and $500 at the end of year 6. if the interest rate earned on the investment is 8 percent, what is its present value? what is its future value?

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Answer from: kay7060

Present value is $923.90 and future value is $1,466.24

Explanation:

Given:

$100 is received in the next three years. It's an annuity so refer present value of annuity table. Present value annuity factor for 3 years, 8% is 2.5771. So present value of this will be $257.71 (2.5771 × 100). Similarly calculation for inflows from the investment are as follows:

$200 at 8% in the 4th year, present value factor of lumpsum amount is 0.7350 which is $147 (0.735 × 200)

$300 at 8% in the 5th year, present value factor of lumpsum amount is 0.6806 which is $204.18 (0.6806 × 300)

$500 at 8% in the 6th year, present value factor of lumpsum amount is 0.6302 which is $315.10 (0.6302 × 500)

Total present value of investment is $923.90 (257.71 + 147 + 204.18 + 315.10)

Present value of inflows are calculated. Calculate future value of these amounts.

future value factor @8%, 6 years is 1.5869.

Future value of first inflow is $408.96 (257.71 × 1.5869)

Future value of second inflow is $233.27 (147× 1.5869)

Future value of third inflow is $324.01 (204.18 × 1.5869)

Fourth Inflow in the sixth year is $500

Total present value of investment is $1,466.24 (408.96 + 233.27 + 324.01 + 500)

Answer from: Quest

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

Answer from: Quest

someone i feel is a leader in my life id have to say would be my mother because she has give me great advice in life and got me out of tough situations. some characteristics she has are creativity, honesty, commitment, respect for others, and communication. one example of a situation when she demonstrated leadership was when i was working late on homework and i started to get stressed and got upset, she asked me if i needed some , and she me with my work. she demonstrated communication and commitment.

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