PRESENT VALUE OF A PERPETUITY What is the present value of a $700 perpetuity if the interest rate is 10%? Round your answer to the nearest cent. $ If interest rates doubled to 20%, what would its present value be? Round your answer to the nearest cent.
Present value of perpetuity=Annual cash flows/interest rate
1.Present value=700/0.1=$7000
2.Present value=700/0.2=$3500
PRESENT VALUE OF A PERPETUITY What is the present value of a $700 perpetuity if the...
PRESENT VALUE OF A PERPETUITY What is the present value of a $600 perpetuity if the interest rate is 6%? Round your answer to the nearest cent. $ If interest rates doubled to 12%, what would its present value be? Round your answer to the nearest cent. $
5.16 What is the present value of a $700 perpetuity if the interest rate is 9%? If interest rates doubled to 18%, what would its present value be? Round your answers to the nearest cent. Present value at 9%: $ Present value at 18%: $
What is the present value of a $500 perpetuity if the interest rate is 6%? If interest rates doubled to 12%, what would its present value be? Round your answers to the nearest cent. Present value at 6%: $ Present value at 12%: $ You borrow $85,000; the annual loan payments are $11,339.91 for 30 years. What interest rate are you being charged? Round your answer to the nearest whole number. You have saved $5,000 for a down payment on...
(Related to Checkpoint 6.5 Present value of a growing perpetuity What is the present value o a perpetual stream o cash flows hat pays $6,500 at the end o year one and he annual cash flows grow at a rate o 2% per year indefinitely, if the appropriate discount rate is 12%? what if the appropriate discount rate is 10%? a f the appropriate discount rate is 12%, the present value of the growing perpetuity is S Round to 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...
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
What is the present value of the following? a. A $500 perpetuity discounted back to the present at 15 percent b. A $4,000 perpetuity discounted back to the present at 19 percent c. A $100 perpetuity discounted back to the present at 16 percent d. A $75 perpetuity discounted back to the present at 12 percent a. What is the present value of a $500 perpetuity discounted back to the present at 15 percent? (Round to the nearest cent.) b. What is the present value of...
1)Find the present values of these ordinary annuities. Discounting occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent. $200 per year for 16 years at 12%. $ $100 per year for 8 years at 6%. $ $1,000 per year for 8 years at 0%. $ Rework previous parts assuming they are annuities due. Present value of $200 per year for 16 years at 12%: $ Present value of $100 per year for 8...
Problem 5-10 Present Value of a Perpetuity (LG5-5) What's the present value, when interest rates are 75 percent of a $215 payment made every year forever? (Round your answer decimal places.) Present value
Find the present value of $700 due in the future under each of these conditions: 7% nominal rate, semiannual compounding, discounted back 10 years. Do not round intermediate calculations. Round your answer to the nearest cent. 7% nominal rate, quarterly compounding, discounted back 10 years. Do not round intermediate calculations. Round your answer to the nearest cent. 7% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent. Why do...