You are considering investing in an annuity that pays $7,000 at the end of each year...
You are considering investing in an annuity that pays $7,000 at the end of each year for the next 20 years. You believe you could earn 6.1% on your money in other investments of equal risk. What is the most you should pay for the annuity? (Assume annual compounding/discounting. Answer in $s to the nearest dollar, i.e. xxxxx, with no commas or $ sign needed.)
Homework Answers
Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=$7000[1-(1.061)^-20]/0.061
=$7000*11.37738535
=79642(Approx).
Add Answer to:
You are considering investing in an annuity that pays $7,000 at
the end of each year...
1. You just inherited some money, and a broker offers to sell you an annuity that pays $32,200 at the end of each year f...
1. You just inherited some money, and a broker offers to sell you an annuity that pays $32,200 at the end of each year for 50 years. You could earn 8% on your money in other investments with equal risk. What is the most you should pay today for the annuity? 2. You have a chance to buy an annuity that pays $85,000 at the beginning of each year for 20 years. You could earn 12.5% on your money in...
You have a chance to buy an annuity that pays $85,000 at the beginning of each year for 20 years. You could earn 12.5% o...
You have a chance to buy an annuity that pays $85,000 at the beginning of each year for 20 years. You could earn 12.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?
You have a chance to buy an annuity that pays $3,300 at the beginning of each...
You have a chance to buy an annuity that pays $3,300 at the beginning of each year for 3 years. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? a. $9,392.86 b. $7,420.36 c. $7,138.57 d. $10,426.07 e. $10,801.78
Your friend offers to pay you an annuity of $2,900 at the end ofeach year...
Your friend offers to pay you an annuity of $2,900 at the end of each year for 3 years in return for cash today. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? Select the correct answer. a. $7,834.61 b. $7,829.31 c. $7,824.01 d. $7,818.71 e. $7,813.41.
Your friend offers to pay you an annuity of $6,300 at the end of each year for 3 years in return for cash today. You cou...
Your friend offers to pay you an annuity of $6,300 at the end of each year for 3 years in return for cash today. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?Select the correct answer.a. $16,996.98b. $17,002.88c. $17,014.68d. $17,020.58e. $17,008.78
(4pts) 1. You just inherited some money, and a broker offers to sell you an annuity...
(4pts) 1. You just inherited some money, and a broker offers to sell you an annuity that pays $32,200 at the end of each year for 50 years. You could earn 8% on your money in other investments with equal risk. What is the most you should pay today for the annuity?
A trust fund established by your uncle pays $42,000 each year-end commencing in one year from...
A trust fund established by your uncle pays $42,000 each year-end commencing in one year from today and then growing at 2.6% per year, in perpetuity. If the trust earns 7.9% per annum, compounding annually, the value of the trust fund today is (to nearest whole dollar; don't include $ sign or commas):
Suppose you have just inherited $10,000 and are considering options for investing the money to maximize...
Suppose you have just inherited $10,000 and are considering options for investing the money to maximize your return. If you are risk-neutral (that is, neither seek out nor shy away from risk), which of the following options should you choose to maximize your expected return? (Hint: To calculate the expected return of an outcome, multiply the probability that an event will occur by the outcome of that event and then add them up.) A. Hold the money in cash and...
A lottery winner will receive $1 million at the end of each of the next ten...
A lottery winner will receive $1 million at the end of each of the next ten years. What is the future value of her winnings at the time of her final payment (in millions of dollars), given that the interest rate is 9.5% per year? (Round your answer to three decimal places.) $ million -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Your grandmother has been putting $1,000 into a savings account on every birthday since your first (that is, when you turned one). The account pays...
A.) You want to buy an annuity that pays you $4,000 at the end of each...
A.) You want to buy an annuity that pays you $4,000 at the end of each year for the next 15 years. If interest rates are 7%, what is a fair price for this annuity? B.) 60 years ago, the average price of a ticket to a movie theater was $0.14. Today, the average price is $9.60. What is rate of inflation in the price of tickets over that time period? C.) You purchase rights to a patent with no...
A trust fund established by your uncle pays $42,000 each year-end commencing in one year from today and then growing at 2.6% per year, in perpetuity. If the trust earns 7.9% per annum, compounding annually, the value of the trust fund today is (to nearest whole dollar; don't include $ sign or commas):
Suppose you have just inherited $10,000 and are considering options for investing the money to maximize your return. If you are risk-neutral (that is, neither seek out nor shy away from risk), which of the following options should you choose to maximize your expected return? (Hint: To calculate the expected return of an outcome, multiply the probability that an event will occur by the outcome of that event and then add them up.) A. Hold the money in cash and...
Most questions answered within 3 hours.
-
What is the hydroxide ion concentration, [OH-], in a solution
with a hydronium ion concentration, [H3O+]...
asked 12 minutes ago -
For Bergson the concept of Being contains less reality than does
the concept of Becoming. True...
asked 26 minutes ago -
What species is the reducing agent in the following
equation?
Mg(s) + 2HCl (aq) --> MgCl2(aq)...
asked 28 minutes ago -
A 50g ice cube is taken out of a freezer at 0 degrees Celsius
and put...
asked 2 hours ago -
How do ratios help you determine trends? What specific
information do managers look at? Is there...
asked 2 hours ago -
A wavelength of 514 nm is used to find an unknown diffraction
grating. If the separation...
asked 2 hours ago -
Use the central limit theorem to find the mean and standard
error of the mean of...
asked 2 hours ago -
You will be given a file that will contain averages for classes
which are divided into...
asked 2 hours ago -
A Pew Research Center poll surveyed a random sample 850 voters
and asked them if they...
asked 2 hours ago -
Design a class named
NumDays, to
store a value that represents a number of hours and...
asked 2 hours ago -
(R)-2-chloro-(S)-3-bromobutane and
(S)-2-chloro-(S)-3-bromobutane are: A. enantiomers. B.
diastereomers. C. meso compounds. D. the same molecule.
asked 2 hours ago -
1_ What is the Frank-Starling law of the heart? And why the
heart cannot function on...
asked 3 hours ago