Present value of perpetuity=Annual cash flows/interest rate
Annual cash flows=(32,000*5%)
which is equal to
=$1600.
A perpetuity has a PV of $32,000. If the interest rate is 5%, how much will...
A $53,000 loan is taken out on a boat with the terms 3% APR for 36 months. How much are the monthly payments on this loan? O A. $1,849.56 OB. $1,695.43 O C. $1,541.30 O D. $2,003.70 A perpetuity will pay $700 per year, starting five years after the perpetuity is purchased. What is the present value (PV) of this perpetuity on the date that it is purchased, given that the interest rate is 7%? OA. $6,103 O B. $3,815...
How much more is a perpetuity of $800 worth than an annuity of the same amount for 38 years? Assume an annual interest rate of 12% and cash flows at the end of each period. Given annual compounding. a.)$98.86 b.)$89.87 c.)$85.38 d.)$92.57
15) A perpetuity will pay $900 per year, starting five years after the perpetuity is purchased. What is the present value (PV) of this perpetuity on the date that it is purchased, given that the interest rate is 11%? A) S4312 B) $2695 C) $3234 D) $5390
A homeowner in a sunny climate has the opportunity to install a solar water heater in his home for a cost of $2900. After installation the solar water heater will produce a small amount of hot water every day, forever, and will require no maintenance. The homeowner's water bill is thus lowered by a fixed amount every year, forever. How much must the homeowner save on water heating costs every year if this is to be a sound investment? (The...
Problem 5-27 Present Value of a Perpetuity (LG5-5) A perpetuity pays $220 per year and interest rates are 7.3 percent. How much would its value change if Interest rates increased to 8.8 percent? (Round your answer to 2 decimal places.) Change in value Did the value increase or decrease? increase O decrease Problem 4 and 5-7 House Appreciation and Mortgage Payments Say that you purchase a house for $272,000 by getting a mortgage for $240,000 and paying a $32,000 down...
How much more money is required to fund an ordinary perpetuity than a 35-year ordinary annuity, if the funds can earn 6% compounded quarterly, and both pay $800 monthly? (Do not round intermediate calculations and round your final answer to 2 decimal places.) $ more money is needed to fund the perpetuity
An perpetuity has continuous payments at a rate of 800 per year. Find the present value of this perpetuity using a nominal rate of interest of 9% compounded continuously. Round your answer to two decimal places.
Problem 5-27 Present Value of a Perpetuity (LG5-5) A perpetuity pays $130 per year and interest rates are 7.8 percent. How much would its value change if interest rates increased to 9.3 percent? (Round your answer to 2 decimal places.) Change in valueſ Did the value increase or decrease? decrease increase
You have agreed to loan the owner of a library $5000 for 5 years at a simple interest rate of 8% per year. 1. How much interest will you receive from the loan? 2. How much will the library owner pay you at the end of 5 years?
You have agreed to loan the owner of a library $5000 for 5 years at a simple interest rate of 8% per year. 1. How much interest will you receive from the...
Please use this formula:
9. A perpetuity will pay X every year. The effective annual interest rate is 7.5%. The present value of this perpetuity 4 years before the first payment is 125,000. Find X. We were unable to transcribe this image