Chapter 3
Nonlevel annuities
Geometric
Homework Answers
CF1 = 6,000
g = 8.5%
r = 6%
N = 15
The present value of the obligation = $100,462.540512
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Chapter 3
Nonlevel annuities
Geometric
An insurance company has an obligation to pay the medical costs...
why do we have to multiply the futuce value of the annuity twice? i understand how...
why do we have to multiply the futuce value of the annuity
twice? i understand how they got up to 5,095 times the future value
of the annuity but am lost after that.
4. An insurance company has an obligation to pay medical bills for a claimant. Average annual claims costs today are $5,000, and medical inflation is expected to be 7% per year. The claimant is expected to live an additional 20 years. Claim payments are made at yearly...
why do we have to multiply the futuce value of the annuity twice? i understand how they got up to 5,095 times the futur...
why do we have to multiply the futuce value of the annuity
twice? i understand how they got up to 5,095 times the future value
of the annuity but am lost after that.
4. An insurance company has an obligation to pay medical bills for a claimant. Average annual claims costs today are $5,000, and medical inflation is expected to be 7% per year. The claimant is expected to live an additional 20 years. Claim payments are made at yearly...
can you please exaplin the underlined step. i dont understand why we have to multiply by...
can you please exaplin the underlined step. i dont understand
why we have to multiply by s twice
surance company has an obligation to pay medical bills for a claimant. Average annual claims today are $5,000, and medical inflation is expected to be 7% per year. The claimant is expected to an additional 20 years. Claim payments are made at yearly intervals, with the first claim payment to due one year from today. Find the present value of the obligation...
Chapter 3 - Nonlevel annuities - Geometric A trust fund has 7000 dollars on January 1,...
Chapter 3 - Nonlevel annuities - Geometric
A trust fund has 7000 dollars on January 1, 2020. It pays interest once a year starting on January 1, 2021 at an annual effective rate of 5%. (a) If the beneficiary makes no withdrawals from the fund, the balance at the end of 10 years will be (b) Now assume that the beneficiary will be allowed to withdraw the interest payment and an additional 10% of the balance on each January 1...
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Problem 5-14 (Algo) Deferred annuities; pension obligation (LO5-8, 5-10] Three employees of the Horizon Distributing Company...
Problem 5-14 (Algo) Deferred annuities; pension obligation (LO5-8, 5-10] Three employees of the Horizon Distributing Company will receive annual pension payments from the company when they retire. The employees will receive their annual payments for as long as they live. Life expectancy for each employee is 15 years beyond retirement. Their names, the amount of their annual pension payments, and the date they will receive their first payment are shown below: (FV of $1, PV of $1, FVA of $1,...
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Chapter 4 Help Save & Exit Wilt has a consulting contract that calls for annual payments...
Chapter 4 Help Save & Exit Wilt has a consulting contract that calls for annual payments of $50,000 a year for five years with the first payment due today. What is the current value of this contract if the discount rate is 8.4 percent? Multiple Choice $214,142 50 $201,86747 $195,618 19 g 1 of 5 Next tps// tml #2: Chapter 4 6 Help Save &Exit Check my You are comparing two annuities with equal present values. The applicable discount rate...
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why do we have to multiply the futuce value of the annuity
twice? i understand how they got up to 5,095 times the future value
of the annuity but am lost after that.
4. An insurance company has an obligation to pay medical bills for a claimant. Average annual claims costs today are $5,000, and medical inflation is expected to be 7% per year. The claimant is expected to live an additional 20 years. Claim payments are made at yearly...
why do we have to multiply the futuce value of the annuity
twice? i understand how they got up to 5,095 times the future value
of the annuity but am lost after that.
4. An insurance company has an obligation to pay medical bills for a claimant. Average annual claims costs today are $5,000, and medical inflation is expected to be 7% per year. The claimant is expected to live an additional 20 years. Claim payments are made at yearly...
can you please exaplin the underlined step. i dont understand
why we have to multiply by s twice
surance company has an obligation to pay medical bills for a claimant. Average annual claims today are $5,000, and medical inflation is expected to be 7% per year. The claimant is expected to an additional 20 years. Claim payments are made at yearly intervals, with the first claim payment to due one year from today. Find the present value of the obligation...
Chapter 3 - Nonlevel annuities - Geometric
A trust fund has 7000 dollars on January 1, 2020. It pays interest once a year starting on January 1, 2021 at an annual effective rate of 5%. (a) If the beneficiary makes no withdrawals from the fund, the balance at the end of 10 years will be (b) Now assume that the beneficiary will be allowed to withdraw the interest payment and an additional 10% of the balance on each January 1...
Spring 2019 Chapter 2: Annuities MAT 3541 Part D Basic problems 1. A perpetuity has payments of w, w, 2w, 2w, 3w, 3w,.. with payments made at the end of each year. The present value using an annual effective interest rate of 10% of this perpetuity is equal to the present value of the geometrically increasing perpetuity with initial payment w and each subsequent payment increasing by a factor of 1+r. Calculate r. [Ans. 0.0826]
You have the opportunity to invest in several annuities. Which of the following 10-year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate. An annuity that pays $1,000 at the end of each year O An annuity that pays $500 at the end of every six months O An annuity that pays $1,000 at the beginning of each year O An annuity that pays $500 at the beginning of every six months...
Problem 5-14 (Algo) Deferred annuities; pension obligation (LO5-8, 5-10] Three employees of the Horizon Distributing Company will receive annual pension payments from the company when they retire. The employees will receive their annual payments for as long as they live. Life expectancy for each employee is 15 years beyond retirement. Their names, the amount of their annual pension payments, and the date they will receive their first payment are shown below: (FV of $1, PV of $1, FVA of $1,...
Chapter 4 Help Save & Exit Wilt has a consulting contract that calls for annual payments of $50,000 a year for five years with the first payment due today. What is the current value of this contract if the discount rate is 8.4 percent? Multiple Choice $214,142 50 $201,86747 $195,618 19 g 1 of 5 Next tps// tml #2: Chapter 4 6 Help Save &Exit Check my You are comparing two annuities with equal present values. The applicable discount rate...
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