You are given: i. The present value of an annuity-due that pays 300 every 6 months during the first 15 years and 200 every evey 6 months during the second 15 years is 6000; ii. the present value of a 15-year deferred annuity-due that pays 350 every 6 months for 15 years is 4000; and iii. the present value of an annuity-due that pays 100 every 6 months during the first 15 years and 200 every 6 months during the next 15 years is X. Determine X

You are given: i. The present value of an annuity-due that pays 300 every 6 months during the first 15 years and 200 every evey 6 months during the second 15 years is 6000; ii. the present value of a 15-year deferred annuity-due that pays 350 every 6 months for 15 years is 4000; and iii. the present value of an annuity-due that pays 100 every 6 months during the first 15 years and 200 every 6 months during the next 15 years is X. Determine X

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A perpetuity of $1 each year, with the first payment due immediately, has a present value of $25 at an annual effective rate of i%. The owner exchanges it for another perpetuity with the first payment due immediately and subsequent payments due at two year intervals. What should the payment of the second perpetuity be, in order to keep the same interest rate, i%, and the same present value? A B с D E Less than $1.90 At least $1.90, but less than $1.94 At least $1.94, but less than $1.98 At least $1.98, but less than $2.02 $2.02 or more
Find the future value of an ordinary annuity if payments are made in the amount R and interest is compounded as given. Then determine how much of this value is from contributions and how much is from interest. R=16,000; 4.3% interest compounded quarterly for 11 years. The future value of the ordinary annuity is $__ (Round to the nearest cent as needed.) The amount from contributions is $__ and the amount from interest is $__. (Round to the nearest cent as needed.)
Annuity A pays 1 at the beginning of each year for five years.Annuity B pays 1 at the beginning of each year for four years.The Macaulay duration of Annuity A at the time of purchase is Σ/10. Both annuities offer thesame yield rate.Calculate the Macaulay duration of Annuity B at the time of purchase. Σ=22
3.) Find the present value of an annuity in perpetuity 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%
1. Find the amount of an ordinary annuity consisting of 24 monthly payments of $150 that earn interest at 10% per year compounded monthly. Round to the nearest cent. b. Find the present value of an ordinary annuity consisting of 18 monthly payments of $150each and earning interest at 5% per year compounded monthly. Round to the nearest cent. c. True or False: The Annuities we deal with in this section are: Certain, Ordinary, and complex.
What is the value of a 30-year annuity that pays $2500 a year? The annuity’s first payment will be received on year 11. Also, assume that the annual interest rate is 4 percent for years 1 through 10 and 5 percent hereafter.
Find the following values assuming a regular, or ordinary, annuity: a. The present value of $400 per year for ten years at 10 percent. b. The future value of $400 per year for ten years at 10 percent. c. The present value of $200 per year for five years at 5 percent.d. The future value of $200 per year for five years at 5 percent.Repeat Problem above but assume the annuities are annuities due.(Dollar signs, decimal places, and commas all matter)
Find the future value of an ordinary annuity if payments are made in the amount R and interest is compounded as given. Then determine how much of this value is from contributions and how much is from interest. R=14,000; 4.6% interest compounded quarterly for 10 years. The future value of the ordinary annuity is $ (Round to the nearest cent as needed.) The amount from contributions is $and the amount from interest is $(Round to the nearest cent as needed.)
Annuity X pays $1,200 at each year-end for 15 years. Annuity Y pays $1,100 at the beginning of each year for 15 years. The effective annual rate is 8%. Which one is correct? Annuity X has a higher present value than Annuity Y. Annuity Y has a higher present value than Annuity X. Annuity X has the same present value as Annuity Y.
Suppose that an individual invests $2,500 at the end of each of the next 6 years and earns an annual interest rate of 8%. Calculate the present value of this series of annuity payments B)Suppose that an individual invests $2,500 at the beginning of each of the next 6 years and earns an annual interest rate of 8%. Calculate the value of this series of annuity payments. How does this result compare with the solution to Part A?
Find the amount of an annuity of 440 payable every three months for 15 years and 3 months, if money is worth 5 ½% m=4 18,088.72 41,609.33 30,254.11 25,311.89 Find the present value of an annuity of 440 payable every three months for 15 years and 3 months, if money is worth 5 ½% m=4 18,088.72 41,609.33 30,254.11 25,311.89
A perpetuity will pay $800 per year, starting five years after the perpetuity is purchased. What is the present value (PV) of this perpetuity on the date that it is purchased, given that the interest rate is 3%?

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