(a). Since the first withdrawal is to be made 3 months from now, it is the case of an annuity due.
(b). The formula for computing the present value of an annuity due is PV = P+P[ 1-(1+r)-(n-1)]/r where P is the periodic payment, r is the interest rate per period and n is the number of periods.
Here, P = $ 2500, n = 16 and r = 7/400. Then PV = 2500 +2500*(400/7)[ 1-(1+7/400)-15] = 2500+1000000*(1-0.770874591) = 2500+1000000*0.229125408 = 2500 + 229125.41 = $ 231625.41( on rounding off to the nearest cent).
Thus, Juanita Domingo’s parents must deposit $ 231625.41 now.
9. 12 points HarMathAp11 6.4.039 My Notes Ask Your Teacher Juanita Domingo's parents want to establish...
9. -/1 points HarMathAp 12 6.4.029. My Notes Ask Your Teacher Recent sales of some real estate and record profits make it possible for a manufacturer to set aside $700,000 in a fund to be used for modernization and remodeling. How much can be withdrawn from this fund at the beginning of each half-year for the next 4 years of the fund earns 7.5%, compounded semiannually? (a) Decide whether the problem relates to an ordinary annuity or an annuity due...
3. -/1 points HarMathAp 12 6.4.007. My Notes Ask Your Teacher With a present value of $125,000, what is the size of the withdrawals that can be made at the end of each quarter for the next 10 years of money is worth 6.2% compounded quarterly? (Round your answer to the nearest cent.) Need Help? Read Watch It Talk to a Tutor My Notes Ask Your Teacher 4. -/1 points HarMathAp 12 6.4.009. that our compounded quarterly and
-11 points TanFin 12 5.3.036. My Notes Ask Your Teacher Yumi's grandparents presented her with a gift of $20,000 when she was 9 years old to be used for her college education. Over the next years, until she turned 17, Yumi's parents had invested her money in a tax-free account that had yielded interest at the rate of 4.5/year compounded monthly. Upon turning 17. Yumi now plans to withdraw her funds in equal annual installments over the next 4 years,...
5. 12 points HarMathAp11 10.3.019 My Notes Ask Your Teacher If the total cost function for a product is C(x) = 240(0.02x + 5)3 dollars, where x represents the number of hundreds of units produced, producing how many units will minimize average cost? units Find the minimum average cost per unit. Submit Answer Save Progress 6. -12 points HarMathAp11 10.3.025 My Notes Ask Your Teacher If the profit function for a product is P(x) = 2700x + 120x2-x3-242,000 dollars, selling...
4. -/1 points HarMathAp12 6.4.009. My Notes Ask Your Teacher A personal account earmarked as a retirement supplement contains $242,200. Suppose $200,000 is used to establish an annuity that earns 5%, compounded quarterly, and pays $6000 at the end of each quarter. How long will it be until the account balance is $0? (Round your answer UP to the nearest quarter.) quarters Need Help? Read It Talk to a Tutor
-/0.5 points HarMathAp12 6.4.043. My Notes Ask Your Teacher 11 A young couple wants to have a college fund that will pay $20,000 at the end of each half-year for 8 years (a) If they can invest at 9%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years to begin making their college withdrawals 6 months after their last investment? (Round your answer to the nearest cent.) $...
7. -/3 points HarMath Ap 12 6.5.017. My Notes Ask Your Teacher The problem describes a debt to be amortized. (Round your answers to the nearest cent.) A man buys a house for $320,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next 13 years. The interest rate on the debt is 13%, compounded semiannually. (a) Find the size of each payment. (b) Find the total amount paid for...
Submit Answer Practice Another Version -/3 points HarMathAp 12 6.5.017. My Notes Ask Your Teacher The problem describes a debt to be amortized (Round your answers to the nearest cent.) A man buys a house for $370,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next years. The interest rate on the debt is 5%, compounded semiannually (a) Find the size of each payment. (b) Find the total amount...
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12 points TanFin12 52027 8. My Notes O Ask Your Teacher The Johnsons have accumulated a nest egg of $40,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of $2300/month in monthly payments (to take advantage of the tax deduction) toward the purchase of their house. However, because of other...
5. -/1 points HarMathAp 12 6.4.011. My Notes Ask Your Teacher Suppose that a 25-year government bond has a maturity value of $1000 and a coupon rate of 9%, with coupons paid semiannually. Find the market price of the bond if the yield rate is 8% compounded semiannually. (Round your answer to the nearest cent.) Is this bond selling at a discount or at a premium? discount premium Need Help?