A. What is the value today of a money machine that will pay $3,781.00 per year for 12.00 years? Assume the first payment is made 2.00 years from today and the interest rate is 14.00%.
B. What is the value today of a money machine that will pay $4,451.00 every six months for 24.00 years? Assume the first payment is made 5.00 years from today and the interest rate is 7.00%.
A). PV of Annuity = Annual Payment * [{1 - (1 + r)-n} / r]
= $3,781 * [{1 - (1 + 0.14)-12} / 0.14]
= $3,781 * [0.7924 / 0.14]
= $3,781 * 5.6603 = $21,401.56
Value of Money Machine today = PV of Annuity / (1 + r)n
= $21,401.56 / (1 + 0.14) = $18,773.30
B). PV of Annuity = Annual Payment * [{1 - (1 + r)-n} / r]
= $4,451 * [{1 - (1 + 0.07)-24} / 0.07]
= $4,451 * [0.8029 / 0.07]
= $4,451 * 11.4693 = $51,050.01
Value of Money Machine today = PV of Annuity / (1 + r)n
= $51,050.01 / (1 + 0.07)4 = $51,050.01 / 1.3108 = $38,945.80
A. What is the value today of a money machine that will pay $3,781.00 per year...
What is the value today of a money machine that will pay $1,598.00 per year for 22.00 years? Assume the first payment is made 2.00 years from today and the interest rate is 12.00%. Submit Answer format: Currency: Round to: 2 decimal places. unanswered not_submitted #2 What is the value today of a money machine that will pay $2,393.00 every six months for 18.00 years? Assume the first payment is made six months from today and the interest rate is...
What is the value today of a money machine that will pay $1,224.00 per year for 13.00 years? Assume the first payment is made 5.00 years from today and the interest rate is 7.00%. What is the value today of a money machine that will pay $1,417.00 every six months for 27.00 years? Assume the first payment is made six months from today and the interest rate is 11.00% What is the value today of a money machine that will...
What is the value today of a money machine that will pay $1,206.00 every six months for 14.00 years? Assume the first payment is made six months from today and the interest rate is 5.00%. Please show work. What is the value today of a money machine that will pay $2,339.00 every six months for 10.00 years? Assume the first payment is made 4.00 years from today and the interest rate is 7.00%.
What is the value today of a money machine that will pay $3,168.00 per year for 30.00 years? Assume the first payment is made one year from today and the interest rate is 10.00%. What is the value today of a money machine that will pay $2,756.00 per year for 30.00 years? Assume the first payment is made 7.00 years from today and the interest rate is 6.00%. What is the value today of a money machine that will pay...
What is the value today of a money machine that will pay $2,756.00 per year for 30.00 years? Assume the first payment is made 7.00 years from today and the interest rate is 6.00%. What is the value today of a money machine that will pay $1,720.00 every six months for 29.00 years? Assume the first payment is made six months from today and the interest rate is 6.00%. What is the value today of a money machine that will...
What is the value today of a money machine that will pay $1,224.00 per year for 13.00 years? Assume the first payment is made 5.00 years from today and the interest rate is 7.00%.
What is the value today of a money machine that will pay $1,456.00 per year for 17.00 years? Assume the first payment is made 7.00 years from today and the interest rate is 5.00%.
What is the value today of a money machine that will pay $1,417.00 every six months for 27.00 years? Assume the first payment is made six months from today and the interest rate is 11.00%. What is the value today of a money machine that will pay $4,146.00 per year for 35.00 years? Assume the first payment is made today and that there are 35.0 total payments. The interest rate is 6.00%. Derek will deposit $3,988.00 per year for 19.00...
What is the value today of a money machine that will pay $3,381.00 per year for 19.00 years? Assume the first payment is made one year from today and the interest rate is 12.00%.
What is the value today of a money machine that will pay $3,915.00 per year for 13.00 years? Assume the first payment is made 7.00 years from today and the interest rate is 6.00%.