Homework Answers
Present value of an ordinary annuity
Here, we’ve Annual Payment (P) = $900 per year
Annual interest rate (r) = 8.00% per year
Number of years (n) = 5 Years
Therefore, the Present Value of an Ordinary Annuity = P x [{1 - (1 / (1 + r) n} / r]
= $900 x [{1 - (1 / (1 + 0.08)5} / 0.08]
= $900 x [{1 - (1 / 1.46932808)} / 0.08]
= $900 x [{1 - 0.68058320} / 0.08]
= $900 x [0.31941680 / 0.08]
= $900 x 3.99271004
= $3,593.44
“Hence, the Present Value of the annuity will be $3,593.44”
Add Answer to:
what the present value of a $900 annuity payment over five years if
interest rates are...
A Alignment Number Conditional Fo Formattina Styles What annual rate of return is earned on a...
A Alignment Number Conditional Fo Formattina Styles What annual rate of return is earned on a $5,000 investment when it grows to $10,750 in six years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value Future value Number of periods $ 5,000 10,750 Complete the following analysis. Do not hard code values in your calculation Annual rate of return
1. What is the present value of a $1,200 payment made in five years when the...
1. What is the present value of a $1,200 payment made in five years when the discount rate is 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 2. What is the future value of a $1,000 annuity payment over four years if interest rates are 8 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 3. What's the present value of a $930 annuity payment over five years...
1. What is the present value of a $1,200 payment made in five years when the...
1. What is the present value of a $1,200 payment made in five years when the discount rate is 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 2. What is the future value of a $1,000 annuity payment over four years if interest rates are 8 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 3. What's the present value of a $930 annuity payment over five years...
Calculate the present value of the following: a-1. Annual payment of $775 for 10 years at...
Calculate the present value of the following: a-1. Annual payment of $775 for 10 years at 4% interest. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present Value: a-2. Annual payment of $575 for 15 years at 4% interest. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present Value: a-3. Which option would you prefer? $775 a year for 10 years $575 a year for 15 years b-1. Annual payment of $775...
What is the present value of a $1,000 annuity payment over four years if interest rates...
What is the present value of a $1,000 annuity payment over four years if interest rates are 7 percent? (Round your answer to two decimal places.) You wish to buy a $10,000 dining room set. The furniture store offers you a three- year loan with an 11 percent APR. What are the monthly payments? (Round your answer to two decimal places.)
Problem 6-4 Calculating Annuity Present Value [LO1] An investment offers $6,400 per year for 15 years,...
Problem 6-4 Calculating Annuity Present Value [LO1] An investment offers $6,400 per year for 15 years, with the first payment occurring on year from now. If the required return is 6 percent, what is the value of the investment? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g. 32.16.) Present value What would the value be if the payments occurred for 40 years? (Do intermediate calculations and round your final answer to 2 decimal...
Problem 5-9 Present Value of a Perpetuity (LG5-5) What's the present value, when interest rates are...
Problem 5-9 Present Value of a Perpetuity (LG5-5) What's the present value, when interest rates are 8.5 percent of a $90 payment made every year forever? (Round your answer to 2 decimal places.) Present value Problem 5-3 Future Value of an Annuity (LG5-2) What is the future value of a $990 annuity payment over five years if interest rates are 9 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value Problem 5-31...
Calculate the present value of the following: a-1. Annual payment of $1,125 for 12 years at...
Calculate the present value of the following: a-1. Annual payment of $1,125 for 12 years at 3% interest. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Presents 789.05 value a-2. Annual payment of $925 for 17 years at 3% interest. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value $ 559.64 a-3. Which option would you prefer? $1,125 a year for 12 years $925 a year for 17 years b-1. Annual...
a. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $270,000 for 15 years?...
a. What is the amount of the annuity purchase
required if you wish to receive a fixed payment of $270,000 for 15
years? Assume that the annuity will earn 10 percent per year.
b. Calculate the annual cash flows (annuity
payments) from a fixed-payment annuity if the present value of the
15-year annuity is $1.7 million and the annuity earns a guaranteed
annual return of 10 percent. The payments are to begin at the end
of the current year.
c....
What is the present value of a $600 annuity payment over 4 years if interest rates...
What is the present value of a $600 annuity payment over 4 years if interest rates are 6 percent?
A Alignment Number Conditional Fo Formattina Styles What annual rate of return is earned on a $5,000 investment when it grows to $10,750 in six years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value Future value Number of periods $ 5,000 10,750 Complete the following analysis. Do not hard code values in your calculation Annual rate of return
What is the present value of a $1,000 annuity payment over four years if interest rates are 7 percent? (Round your answer to two decimal places.) You wish to buy a $10,000 dining room set. The furniture store offers you a three- year loan with an 11 percent APR. What are the monthly payments? (Round your answer to two decimal places.)
Problem 6-4 Calculating Annuity Present Value [LO1] An investment offers $6,400 per year for 15 years, with the first payment occurring on year from now. If the required return is 6 percent, what is the value of the investment? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g. 32.16.) Present value What would the value be if the payments occurred for 40 years? (Do intermediate calculations and round your final answer to 2 decimal...
Problem 5-9 Present Value of a Perpetuity (LG5-5) What's the present value, when interest rates are 8.5 percent of a $90 payment made every year forever? (Round your answer to 2 decimal places.) Present value Problem 5-3 Future Value of an Annuity (LG5-2) What is the future value of a $990 annuity payment over five years if interest rates are 9 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value Problem 5-31...
Calculate the present value of the following: a-1. Annual payment of $1,125 for 12 years at 3% interest. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Presents 789.05 value a-2. Annual payment of $925 for 17 years at 3% interest. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value $ 559.64 a-3. Which option would you prefer? $1,125 a year for 12 years $925 a year for 17 years b-1. Annual...
a. What is the amount of the annuity purchase
required if you wish to receive a fixed payment of $270,000 for 15
years? Assume that the annuity will earn 10 percent per year.
b. Calculate the annual cash flows (annuity
payments) from a fixed-payment annuity if the present value of the
15-year annuity is $1.7 million and the annuity earns a guaranteed
annual return of 10 percent. The payments are to begin at the end
of the current year.
c....
Most questions answered within 3 hours.
-
A gas occupies 200. mL in a piston. If the pressure of the
piston were decreased...
asked 4 minutes ago -
A fossil is found to have a 14C level of 71.0% compared to
living organisms. How...
asked 8 minutes ago -
Many communist or socialist countries have a department that
addresses public health as well as the...
asked 9 minutes ago -
the following questions are either true or false answers
1. The Central Limit Theorem allows one...
asked 10 minutes ago -
The patient recovery time from a particular surgical procedure
is normally distributed with a mean of...
asked 16 minutes ago -
Human relations refer to the way a company arranges people,
jobs, and communications so that work...
asked 33 minutes ago -
Python Program: Design the logic for and implement a program
that merges the two files into...
asked 31 minutes ago -
The specific radiocarbon activity of a sample of wood is 6.25
gms dpm/gm of carbon. The...
asked 36 minutes ago -
An aqueous magnesium chloride solution is made by dissolving
6.96 moles of MgCl2 in sufficient water...
asked 39 minutes ago -
Ken believes the average age of men who come to get a haircut at
his barber...
asked 1 hour ago -
(Ratio Analysis): Last year Co. XYZ had sales of $ 400,000, with
“cost of goods sold”...
asked 1 hour ago -
can someone please write the balanced chemical
equation for the synthesis of Bromoacetanilide
from;
aniline +...
asked 1 hour ago