Question 1 Assume you are planning to invest $5,700 each year for six years and will earn 7% per year. Determine the future value of this annuity due problem if your first $5,700 is invested now. Please show each step of your calculation
Q: Find the present value (at time zero) of a perpetuity that pays $10,000 each year with its first…
A: The cash flows that are started at a specified period instead of immediately after the investment…
Q: Your insurance company offered you an annuity that pays you $100 at the end of each year. The life…
A: GIVEN, A= $100 N=10 R=8%
Q: To find the value of an annuity due, you will multiply the value of the ordinary annuity by…
A: Present value is the current worth of the future payments that are to be received. As per time value…
Q: 9-1 If you invest $500 today in an account that pays 6 percent interest compounded annually, how…
A: 1 PRESENT VALUE 500 INTEREST RATE 6% YEARS 2 PMT 0 2 FUTURE VALUE 1000…
Q: 4. You want to have a monthly income of $2000 from a fixed-term annuity when you retire. Take the…
A: Time value concept Receiving today an amount is of more value than that of receiving the same amount…
Q: An investor wants to save money to purchase real estate. He buys an annuity with quarterly payments…
A: Here, Quarterly Payment is $163 Interest Rate (r) is 5.5% Compounding Period (m) is Quarterly i.e 4…
Q: A) How much should you deposit at the end of each month into an investment account that pays 8.5%…
A: Therefore, the monthly payment is $385.27.
Q: Answer the following problems. Show your solutions. Annuity 1. How much money will you accumulate by…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: b) If you can earn 12 percent on your investments, and you would like to accumulate $120,000 for…
A: Amount required at the end of 18th year (FV) = $120,000 Interest rate (i) = 0.12 or 12% Annuity…
Q: Question 3 What is the future value four years from now of each of the following cash-flow streams…
A: Interest rate = 5.25% compounded quarterly Effective Interest Rate = (1 + (Interest Rate / Number of…
Q: A) How much should you deposit at the end of each month into an investment account that pays 8.5%…
A: A. Compound interest is the interest that the amount will be calculated on both principle and…
Q: (Future value of an annuity and annuity payments) You are trying to plan for retirement in 12…
A: Saving Account $ 2,10,000 Stocks $ 3,50,000 Annual deposit in saving…
Q: Assume you currently have $220,000 that you are ready to invest for retirement. In addition, you…
A: Compounding is a technique which is used to find the FV of present amount by using appropriate…
Q: Problem 7-17 You have an IRA worth $250,000 and want to start to make equal, annual withdrawals…
A: 1) Computation of withdrawal amount: Hence, the amount of drawings is $16,002.99.
Q: Suppose you have an opportunity to buy an annuity that pays $3,500 at the end of each year for 6…
A: Present Value of Annuity=Annuity×1-11+ratetimerate
Q: Suppose that an individual invests $2,500 at the end of each of the next 6 years and earns an…
A: Whenever we are finding present value of a series of fixed payments made in the future, it is called…
Q: At the beginning of the year you deposit $3,000 in a savings account. How much will accumulate in 3…
A: Future value refers to the value of current assets at some future date on the basis of the assumed…
Q: Suppose you wish to retire forty years from today. You determine that you need $50,000 per year once…
A: Given information : Years to retirement = 40 years Funds needed after retirement = $50,000 Interest…
Q: 9. Assume you are planning to invest OMR5,000 each year for six years and will earn 10 percent per…
A: Ordinary annuities are the payments (PMTs) which are made at the end of the period.
Q: 1.1) For $20,000, you can purchase a five-year annuity that will pay $5000 per year for five years.…
A: Here, Details of 1.1 Present Value (PV) is $20,000 Annuity Payment (PMT) is $5,000 Time Period…
Q: Evaristo would like invest N$ 12,500.00 a month at the beginning of each month at an interest rate…
A: Given: Initial investment (Present value)=$12500Rate (compounded quarterly) (r)=12%=124=3%…
Q: 5. Consider an annuity where you receive $1,000 payments at the end of each year for the next 20…
A: The present value is the present worth of the amount that will be paid or received at future.
Q: Problem 1: You can choose between two different investments: (A) an annuity that pays $10,000 each…
A: Computation of present value of investments: Interest rate is 5% Annuity: Hence, the present value…
Q: PART 1 ORDINARY ANNUITY PROBLEM a. What sum will be paid at the end of every three months for 5…
A: Compound Amount= P* (1+ R)T A. Given Interest rate= 6% Quarterly interest rate= 6%/4=1.5% Period=…
Q: Use the annuity formula to calculate the future value of an annuity where you deposit $50 into an…
A: Monthly deposit (D) = $50 Monthly interest rate (r) = 0.00416666666666667 (i.e. 0.05 / 12) Monthly…
Q: 1) Assume you deposited $6,000 into a retirement savings account today. The account will earn 8…
A: Initial Deposit = 6000 Interest Rate = 8% Annual Compounding Time Period (N) = 48 years
Q: How much will you need to invest annually to reach a savings goal of $300,000 at the end of 25…
A: n=25r=5%FV=300000
Q: ow at 9.6%?
A: Here, P = $10,800 i = 0.096 n = 11 Now, Future Value of Annuity (FVA) is FVA=P x(1+i)n-1i…
Q: a) Find the Future Value of an annuity for$1000 paid at the end of each year for 3 years assuming…
A: Future Value = Present Value(1+r)^n n =3 years r=7% Present Value =$1000 Future Value…
Q: Problem 3 You are working for a finance firm and a client comes to you and wants to know how much…
A: PV is the current worth of cash flows that are expected to occur in the future.
Q: 1 points You have just retired with savings of $5 million. If you expect to live for 59 years and to…
A: The equivalent annual spending is the periodic payment made towards the acquisition of an asset or…
Q: QUESTION 5 What is the present value of an annuity (to nearest dollar) that will give you 25…
A: FORMULA USED FOR CALCULATING THE PRESENT VALUE OF ANNUITY IS AS FOLLOW : GIVEN: RATE = 10% NPER =…
Q: Calculating Future Values Assume you deposit $1,000 today in an account that pays 8 percent…
A: The future value (FV) is the amount of money at some future time given a particular interest rate…
Q: How much monthly deposit must be made for 7 years and 3 months in order to accumulate 24, 500 at 9%…
A: Honor Code: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be…
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- Find the present value of an annuity with payments of $1,250 at the end of each year for 7 years. The interest rate is 5% compounded annually. Question content area bottom Part 1 The present value of the annuity is $enter your response here. (Round the final answer to the nearest cent as needed.● An investment will provide you with $100 at the end of each year for the next 10 years. What is the present value of that annuity if the discount rate is 8% annually? • What is the present value of the above if the payments are received at the beginning of each year? • If you deposit those payments into an account earning 8%, what will the future value be in 10 years? • What will the future value be if you open the account with $1,000 today, and then make the $100 deposits at the end of each year?What is the future value of an annuity of $10,800 invested every year for the next 11 years starting one year from now at 9.6%? Answer: $ Blank 1
- THE EST ANSWER. Question 3 An investor will receive an annuity of $3,500 a year for 12 years. The first payment is to be received four years from today. At an 8% discount rate, this annuity's worth today is closest to:What is the value now of an annuity that paysf $6,000 at the end of each of the next 92 years assuming an interest rate is 9% per year? Question content area bottom Part 1 The PV is $enter your response here. (Round to the nearest dollar.)Problem 6 What is the annual equal amount of money you have to set aside to guarantee yourself an annual income to perpetuity of $15,000 starting in 41 years from now? You make the first payment in three years from now and the last payment in 40 years. Assume an interest rate of 7% (EAR).
- QUESTION 11 Assume that you contribute $160 per month to a retirement plan for 25 years. Then you are able to increase the contribution to $360 per month for the next 25 years. Given a 7.2 percent interest rate, what is the value of your retirement plan after the 50 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value of multiple annuities?Problem 6 A person wants to establish an annuity for retirement purposes. He wants tomake quarterly deposits for 20 years so that he can then make quarterly withdrawals of$5,000 for 10 years. The annuity earns 7.32% interest compounded quarterly.(a) How much will have to be in the account at the time he retires?(b) How much should be deposited each quarter for 20 years in order to accumulate the Please give full solutionrequired amount?Suppose you have an opportunity to buy an annuity that pays $3,500 at the end of each year for 6 years, at a 9% interest rate. What is the most you should pay for the annuity? USE FORMULA
- Compute the present value of a perpetuity that pays $6,744 annually given a required rate of return of 9 percent per annum. Round your answer to 2 decimal places; record your answer without commas and without a dollar sign. Answer Question 4 Assume that you deposit $3,956 each year for the next 15 years into an account that pays 20 percent per annum. The first deposit will occur one year from today (that is, at t = 1) and the last deposit will occur 15 years from today (that is, at t = 15). How much money will be in the account 15 years from today? Round your answer to 2 decimal places; record your answer without commas and without a dollar sign.Use Table 12-2 to find how much should be deposited now at 6% interest, compounded monthly, to yield an annuity payment of $400 at the beginning of each month, for 2 years. Step 1 The present value of an annuity is the amount needed now so that desired annuity payments may be made in the future. In this scenario annuity payments will be made at the beginning of each month. Thus, this is an annuity due. To find the present value of this annuity, the amount of money that should be deposited in an account now, the interest rate per period must first be found. The interest rate per period is calculated using the nominal, or annual, rate and the number of periods per year as follows. interest rate per period = nominal rate periods per year The rate was given to be 6%. Interest is compounded monthly, or 12 times per year. Find the interest rate per period. interest rate per period = nominal rate periods per year = % 12 = %…Suppose that you have inherited an annuity with the parameters given below. What is the present value of this annuity? Round your final answer to two decimals First payment: First payment occurs: Constant payment growth rate: Payment frequency: Cost of Capital: Term: Present value 424.00 2 years from now 1% Annually Annual 8% Annually 18 Years