Atlas Insurance wants to sell you an annuity which will pay you $600 per quarter for...
Atlas Insurance wants to sell you an annuity which will pay you $600 per quarter for 20 years. You want to earn a minimum rate of return of 5.0 percent compounded quarterly. What is the most you are willing to pay as a lump sum today to buy this annuity?
Homework Answers
| Annual rate of interest | 5% | |||
| Quarterly rate of interest (5/4) | 1.25% | |||
| Annuity for 80 periods at 1.25% | 50.38666 | |||
| Annuity received quarterly | 600 | |||
| Value of annuity today (600*50.38666) | 30232 | |||
Add Answer to:
Atlas Insurance wants to sell you an annuity which will pay you
$600 per quarter for...
We Pay Insurance Co. will pay you $1,450 each quarter for 27 years. You want to...
We Pay Insurance Co. will pay you $1,450 each quarter for 27 years. You want to earn a minimum interest rate of .99 percent per quarter. What is the most you are willing to pay today for these payments? $95,420.38 $91,124.72 $277,956.49 $92,723.40 $95,920.76
We Pay Insurance Co. will pay you $1,500 each quarter for 29 years. You want to...
We Pay Insurance Co. will pay you $1,500 each quarter for 29 years. You want to earn a minimum interest rate of 1.01 percent per quarter. What is the most you are willing to pay today for these payments? o 598,815.74 o 5101,755.64 o o 5327956.65 $102,223.18
1. You just inherited some money, and a broker offers to sell you an annuity that pays $32,200 at the end of each year f...
1. You just inherited some money, and a broker offers to sell you an annuity that pays $32,200 at the end of each year for 50 years. You could earn 8% on your money in other investments with equal risk. What is the most you should pay today for the annuity? 2. You have a chance to buy an annuity that pays $85,000 at the beginning of each year for 20 years. You could earn 12.5% on your money in...
You own an annuity due contract that will pay you $3,000 per year for 12 years....
You own an annuity due contract that will pay you $3,000 per year for 12 years. You need money to pay back a loan in 5 years, and you are afraid if you get the annuity payments annually you will spend the money and not be able to pay back your loan. You decide to sell your annuity for a lump sum of cash to be paid to you five years from today. If the interest rate is 8%, what...
You have two choices of investments: Investment A is a 15-year annuity that requires end-of-quarter $1,400...
You have two choices of investments: Investment A is a 15-year annuity that requires end-of-quarter $1,400 payments that earn an interest rate of 9% compounded quarterly. - Investment B is a 15-year lump sum investment that earns an interest rate of 11% compounded annually. How much money would you need to invest in Investment B today for it to be worth as much as Investment A 15 years from now? 1) $34,415 2) $40,415 3) $36,415 4) $42,415 5) $38,415
You estimate that you will owe $45,300 in student loans by the time you graduate. The...
You estimate that you will owe $45,300 in student loans by the time you graduate. The interest rate is 4.25 percent. If you want to have this debt paid in full within ten years, how much must you pay each month? Your insurance agent is trying to sell you an annuity that costs $230,000 today. By buying this annuity, your agent promises that you will receive payments of $1,225 a month for the next 30 years. What is the rate...
Value of a retirement annuity Personal Finance Problem An insurance agent is trying to sell you...
Value of a retirement annuity Personal Finance Problem An insurance agent is trying to sell you an immediate-retirement annuity, which for a single amount paid today will provide you with $11,100 at the end of each year for the next 15 years You currently earn 7% on lovrisk investments comparable to the retrement annuity Ignoring taxes, what is the most you would pay for this annuity? ignoring taxes, the most you would pay for this annuity leu (Round to the...
1. You can buy a contract which will pay $ 10,000 per year for 3 years...
1. You can buy a contract which will pay $ 10,000 per year for 3 years for $26,500. If investments of similar risk return 8% per annum, compounded annually, should you buy the contract? 2. How much do you need to deposit TODAY into an account which earn 8% ANNUAL interest compounded Quarterly so that you will have $ 50,000 in the account seven years from now? 3. What ANNUAL rate of return did an investment pay if a $...
a. Suppose a 65-year-old person wants to purchase an annuity from an insurance company that would pay $21,700 per year...
a. Suppose a 65-year-old person wants to purchase an annuity from an insurance company that would pay $21,700 per year until the end of that person's life. The insurance company expects this person to live for 15 more years and would be willing to pay 7 percent on the annuity. How much should the insurance company ask this person to pay for the annuity? b. A second 65-year-old person wants the same $21,700 annuity, but this person is healthier and...
How much would you pay today for this annuity? It will payout $740 each quarter for...
How much would you pay today for this annuity? It will payout $740 each quarter for 20 years. Your desired annual interest return is 5.9 %. (Don't forget to adjust the interest rate for quarterly, in addition to the time period.) a. $34,620.05 b. 30,102.01 c. 34,228.31 d. 31,972.27 e. 32,457.76 Thank you!!
We Pay Insurance Co. will pay you $1,500 each quarter for 29 years. You want to earn a minimum interest rate of 1.01 percent per quarter. What is the most you are willing to pay today for these payments? o 598,815.74 o 5101,755.64 o o 5327956.65 $102,223.18
You have two choices of investments: Investment A is a 15-year annuity that requires end-of-quarter $1,400 payments that earn an interest rate of 9% compounded quarterly. - Investment B is a 15-year lump sum investment that earns an interest rate of 11% compounded annually. How much money would you need to invest in Investment B today for it to be worth as much as Investment A 15 years from now? 1) $34,415 2) $40,415 3) $36,415 4) $42,415 5) $38,415
Value of a retirement annuity Personal Finance Problem An insurance agent is trying to sell you an immediate-retirement annuity, which for a single amount paid today will provide you with $11,100 at the end of each year for the next 15 years You currently earn 7% on lovrisk investments comparable to the retrement annuity Ignoring taxes, what is the most you would pay for this annuity? ignoring taxes, the most you would pay for this annuity leu (Round to the...
a. Suppose a 65-year-old person wants to purchase an annuity from an insurance company that would pay $21,700 per year until the end of that person's life. The insurance company expects this person to live for 15 more years and would be willing to pay 7 percent on the annuity. How much should the insurance company ask this person to pay for the annuity? b. A second 65-year-old person wants the same $21,700 annuity, but this person is healthier and...
Most questions answered within 3 hours.
-
When you move a rope up and down, waves are created. If the
waves pass through...
asked 30 minutes ago -
QUESTION 52
Which of the following is a direct result of scarcity?
A college student misses...
asked 31 minutes ago -
The zero order reaction 2N2O→2N2+O2 has the rate constant k of
7.20×10−3 molL s. If the...
asked 33 minutes ago -
When you borrow money to buy a house, a car, or for some other
purpose, you...
asked 48 minutes ago -
Write a c program that finds the uncommon elements from two
array elements using pointers
only...
asked 54 minutes ago -
SQL help:
Design a database diagram for a database that stores information
about the Downloads that...
asked 2 hours ago -
In 1970s and 1980s, molecular biologists discovered that the
hormone testosterone, binds a receptor protein that...
asked 4 hours ago -
january 1 2010 road catering service purchase a piece of
equipment for 58000 which is expected...
asked 4 hours ago -
Explain Mertons concept of anomie is and what the
modes of adaptation to it are?
asked 5 hours ago -
Jamie is doing a survey at her school about whether the students
feel the cafeteria food...
asked 6 hours ago -
How many liters of 0.669 M KOH will be needed to raise the pH of
0.339...
asked 9 hours ago -
A liquid of density 1270 kg/m 3 flows steadily through a pipe of
varying diameter and...
asked 9 hours ago