Find the future value of an investment if Br . 100000 loan to be repaid in equal installment at the end of each of the next 5 years ? The interest rate is 10% compounded annually.
To find the future value of the investment, we can use the formula for the future value of an annuity:
FV = PMT x ((1 + r)^n - 1) / r
where:
PMT = the amount of each installment payment
r = the interest rate per period
n = the number of periods
In this case, PMT = Br . 100000 / 5 = Br . 20000 (since the loan is to be repaid in 5 equal installments), r = 10% (since the interest rate is 10% per year), and n = 5 (since there are 5 payment periods).
Plugging these values into the formula, we get:
FV = Br . 20000 x ((1 + 0.10)^5 - 1) / 0.10
FV = Br . 20000 x (1.61051 - 1) / 0.10
FV = Br . 20000 x 0.61051 / 0.10
FV = Br . 122102.00
Therefore, the future value of the investment is Br . 122102.00.
How much must you deposit now on January 12017 to have a balance of bro 10000 on December 31 2025 ? interest is compounded vst 8% annual rate .
To find out how much you must deposit now to have a balance of Br. 10000 on December 31, 2025, we can use the present value formula:
PV = FV / (1 + r)^n
where:
PV = present value
FV = future value
r = interest rate per period (annual rate divided by the number of compounding periods per year)
n = number of periods
In this case, we need to find the present value of a future value of Br. 10000 on December 31, 2025, using an annual interest rate of 8%.
The number of years between January 1, 2017, and December 31, 2025, is 9. So, n = 9.
Plugging these values into the formula:
PV = 10000 / (1 + 0.08/1)^9
PV = 10000 / (1.08)^9
PV = 4713.58
Therefore, you must deposit Br. 4,713.58 on January 1, 2017, to have a balance of Br. 10,000 on December 31, 2025, assuming an annual interest rate of 8% compounded annually.
To find the future value of an investment with equal installments and compound interest, you can use the formula for the future value of an ordinary annuity:
FV = P * ((1 + r)^n - 1) / r
Where:
FV = Future Value
P = Payment (equal installment)
r = Interest rate per period (annual rate divided by the number of compounding periods)
n = Number of compounding periods
In this case, the loan amount is BHD 100,000 and it will be repaid in equal installments at the end of each of the next 5 years. The interest rate is 10% compounded annually.
First, we need to calculate the equal installment payment using the present value of an ordinary annuity formula:
PV = P * (1 - (1 + r)^(-n)) / r
Rearranging the formula to solve for P:
P = PV * (r / (1 - (1 + r)^(-n)))
In this case, PV is BHD 100,000, r is 0.1 (10% expressed as a decimal), and n is 5.
P = 100000 * (0.1 / (1 - (1 + 0.1)^(-5)))
P = 100000 * (0.1 / (1 - 1.61051))
P = 100000 * (0.1 / (-0.61051))
P ≈ BHD 31,988.30
Now that we have the equal installment payment, we can calculate the future value using the formula mentioned earlier:
FV = P * ((1 + r)^n - 1) / r
FV = 31988.30 * ((1 + 0.1)^5 - 1) / 0.1
FV = 31988.30 * (1.61051 - 1) / 0.1
FV ≈ BHD 183,285.20
Therefore, the future value of the loan will be approximately BHD 183,285.20.