Michael is receiving an annuity due with monthly payments for 20 years. Each monthly payment in...
Michael is receiving an annuity due with monthly payments for 20 years. Each monthly payment in the first year is 130. Each monthly payment in the second year is 260. Each monthly payment in the third year is 390. The payments continue to increase in the same pattern until each monthly payment in the 20th year is 2600. Using an annual effective rate of interest of 7%, calculate the present value of this annuity.
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Michael is receiving an annuity due with monthly payments for 20 years. Each monthly payment in...
Dake is receiving a perpetuity due with annual payments. The payments are $1,000 at the beginning...
Dake is receiving a perpetuity due with annual payments. The payments are $1,000 at the beginning of each year except the payment at the beginning of every fifth year is $6,000. In other words, the first four payments at $1,000 with the fifth payment being $6,000. This is followed by four more payments of $1,000 and then a fifth payment of $6,000. This pattern continues forever. Using an annual effective interest rate of 8%. Calculate the present value of this...
3) Find the present value of a 20 year annuity due where payments are $1,000 at...
3) Find the present value of a 20 year annuity due where payments are $1,000 at the beginning of the first year, third year, etc. and payments are $1,500 at the beginning of the second year, fourth year, etc. Here effective annual interest is 5% Hint: Draw a time diagram!!!
An annuity immediate with annual payments has an initial payment of 1. Subsequent payments increase by...
An annuity immediate with annual payments has an initial payment of 1. Subsequent payments increase by 1 until reaching a payment of 10. The next payment after the payment of 10 is also equal to 10, and then subsequent payments decrease by 1 until reaching a final payment of 1. Determine the annual effective interest rate at which the present value of this annuity is 78.60. (A) .0325 (B) .0335 (C) .0345 (D) .0355 (E) .0365
20. An annuity due that lasts for 30 years has annual payments of 500 at the...
20. An annuity due that lasts for 30 years has annual payments of 500 at the beginning of each year for 15 years, and 1000 at the beginning of each year for the followiing 15 years. A perpetuity due has payments of P each year for 20 years and then annual payments of 2P thereafter. The present values of the annuity and the perpetuity are the same if d = 9%. Find P.
7. An annuity provides for 30 annual payments. The first payment of 100 is made immediately...
7. An annuity provides for 30 annual payments. The first payment of 100 is made immediately and the remaining payments increase by 8% per year. Interest is calculated at an annual effective interest rate of 13.4% per year. Calculate the present value of the annuity. Give your answer rounded to the nearest whole number. Answer:
A 40 year annuity-due will pay 10 in each of the first 4 years, 9 in...
A 40 year annuity-due will pay 10 in each of the first 4 years, 9 in each of the next 4 years, etc., until payments of 1 are made in each of the last 4 years. The present value of the annuity payments at an annual effective rate of 5% is X. Determine X.
A perpetuity-due paying 5 every year has a present value of 90. An annuity-immediate paying 10...
A perpetuity-due paying 5 every year has a present value of 90. An annuity-immediate paying 10 monthly for 5 years has the same effective rate of interest what is the present value of this annuity? Hint: To calculate the monthly annuity, you should find the present value of a 60 payment annuity using the monthly effective rate of interest that is equivalent to to the annual effective rate of interest that you derived from the perpetuity. That is find i...
A perpetuity-due with varying annual payments is available. During the first five years the payment is...
A perpetuity-due with varying annual payments is available. During the first five years the payment is constant and equal to 40. Beginning in year 6, the payments start to increase. For year 6 and all future years the payment in that year is k% larger than the payment in the year immediately preceding that year. (k <6). At an annual effective interest rate of 6.7%, the perpetuity has a present value of 751.50. Calculate k.
Erik receives an eight year annuity immediate with monthly payments. The first payment is $300 and...
Erik receives an eight year annuity immediate with monthly payments. The first payment is $300 and the payments increase by $6 each month. The payments are deposited in an account earning interest at a nominal rate of 6% convertible monthly. What is the balance in the account at the end of eight years? Answer is 69,042.81 Do it without excel!!!
Two annuities have equal present values. The first is an annuity-immediate with quarterly payments of $X...
Two annuities have equal present values. The first is an annuity-immediate with quarterly payments of $X for 10 years. The second is an increasing annuity-immediate with 10 annual payments, where the first payment is $500 and subsequent payments increase by 10% per year. Find X if the annual effective interest rate is 5%. (Answer: 188.28)
3) Find the present value of a 20 year annuity due where payments are $1,000 at the beginning of the first year, third year, etc. and payments are $1,500 at the beginning of the second year, fourth year, etc. Here effective annual interest is 5% Hint: Draw a time diagram!!!
20. An annuity due that lasts for 30 years has annual payments of 500 at the beginning of each year for 15 years, and 1000 at the beginning of each year for the followiing 15 years. A perpetuity due has payments of P each year for 20 years and then annual payments of 2P thereafter. The present values of the annuity and the perpetuity are the same if d = 9%. Find P.
7. An annuity provides for 30 annual payments. The first payment of 100 is made immediately and the remaining payments increase by 8% per year. Interest is calculated at an annual effective interest rate of 13.4% per year. Calculate the present value of the annuity. Give your answer rounded to the nearest whole number. Answer:
A 40 year annuity-due will pay 10 in each of the first 4 years, 9 in each of the next 4 years, etc., until payments of 1 are made in each of the last 4 years. The present value of the annuity payments at an annual effective rate of 5% is X. Determine X.
A perpetuity-due with varying annual payments is available. During the first five years the payment is constant and equal to 40. Beginning in year 6, the payments start to increase. For year 6 and all future years the payment in that year is k% larger than the payment in the year immediately preceding that year. (k <6). At an annual effective interest rate of 6.7%, the perpetuity has a present value of 751.50. Calculate k.
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