7. You buy an annuity which will pay you $12,000 a year for ten years. The...
Problem 7-20 You are offered an annuity that will pay $10,000 a year for ten years (that is, ten payments), but the payments start after four years have elapsed. If you want to earn 9 percent on your funds, what is the maximum you should pay for this annuity? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.
You are comparing two annuities which offer annual payments for ten years. Both annuities are identical with the exception of the payment dates. Annuity A pays on the first day of each year (i.e., the first payment will occur today) while annuity B pays on the last day of each year (i.e., the first payment will occur a year from today). Which one of the following statements is correct concerning these two annuities? Multiple Choice Both annuities are of equal...
An annuity is set up that will pay $1,600 per year for ten years. What is the present value (PV) of this annuity given that the discount rate is 9%? a. $6,161 b. $12,322 c. $10,268 d. $14,375
Question 8 1 pts You buy an ordinary annuity today for $121,330, which promises to pay you $10,536 per year. If the interest rate is 5.82 percent, for how many years will you receive payments? Answer to 4 decimals.
Question 8 1 pts You buy an ordinary annuity today for $127.791, which promises to pay you $13,753 per year. If the interest rate is 7.25 percent, for how many years will you receive payments? Answer to 4 decimals. 15.9991
You are offered an annuity that will pay $23,000 per year for 9 years (the first payment will be made today). If you feel that the appropriate discount rate is 10%, what is the annuity worth to you today? $312,327.97 $145,703.30 $132,457.55 $343,560.77 $259,008.08
You own an annuity due contract that will pay you $3,000 per year for 12 years. You need money to pay back a loan in 5 years, and you are afraid if you get the annuity payments annually you will spend the money and not be able to pay back your loan. You decide to sell your annuity for a lump sum of cash to be paid to you five years from today. If the interest rate is 8%, what...
A 5-year annuity of ten $9,000 semiannual payments will begin 8 years from now, with the first payment coming 8.5 years from now. a. If the discount rate is 6 percent compounded monthly, what is the value of this annuity 2 years from now? b. What is the current value of the annuity? as went is recurent value
New Jersey Mutual has offered you a single premium annuity that will pay you $12,000 per year (end of year) for the next 15 years. If you must pay $109,296 today for this annuity, what is your expected rate of return? Please show work
1. You can buy a contract which will pay $ 10,000 per year for 3 years for $26,500. If investments of similar risk return 8% per annum, compounded annually, should you buy the contract? 2. How much do you need to deposit TODAY into an account which earn 8% ANNUAL interest compounded Quarterly so that you will have $ 50,000 in the account seven years from now? 3. What ANNUAL rate of return did an investment pay if a $...