1. How many years will it take $400 to grow to $1671 if it is invested at 10 percent compounded annually?
2. At what rate would $1000 have to be invested to grow to $4046 in 10 years ?
3. What is the present value of an ordinary annuity of $1000 per year for 7 years discounted back to the present at 10 percent? What would be the present value if it were an annuity due?
4. You have just borrowed $100,000 and you agree to pay it back over the next 25 years in 25 equal end of the year payments plus 10 percent compound interest on the unpaid balance ? What will be the size of these payments?
5. What is the present value of a $1000 perpetuity discounted back to the present at 8 percent?
6. What is the present value of a $1000 annuity for 10 years, with the first payment occuring at the end of year 10( that is, ten $1000 payments occuring at the end of year 10 through year 19)given a discount rate of 10 percent?
7. Given a 10 percent discount rate, what is the present value of a perpetuity of $1000 per year if the first payment does not begin until the end of year 10?
1. How many years will it take $400 to grow to $1671 if it is invested at 10 percent compounded annually?
2. At what rate would $1000 have to be invested to grow to $4046 in 10 years ?
3. What is the present value of an ordinary annuity of $1000 per year for 7 years discounted back to the present at 10 percent? What would be the present value if it were an annuity due?
4. You have just borrowed $100,000 and you agree to pay it back over the next 25 years in 25 equal end of the year payments plus 10 percent compound interest on the unpaid balance ? What will be the size of these payments?
5. What is the present value of a $1000 perpetuity discounted back to the present at 8 percent?
6. What is the present value of a $1000 annuity for 10 years, with the first payment occuring at the end of year 10( that is, ten $1000 payments occuring at the end of year 10 through year 19)given a discount rate of 10 percent?
7. Given a 10 percent discount rate, what is the present value of a perpetuity of $1000 per year if the first payment does not begin until the end of year 10?
Related questions
| a. | Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $2 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of the current year |
| b. | Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $2 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of six years. |
| c. | What is the amount of the annuity purchase required if you wish to receive a fixed payment of $230,000 for 20 years? Assume that the annuity will earn 10 percent per year. |
