A five-year annuity of ten $5,900 semiannual payments willbegin 9 years from now, with the first payment coming 9.5 yearsfrom now. The discount rate is 8 percent compunded monthly.
a. What is the value of this annuity five years from now?(Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.) b. What is the value three years from now?(Do not round intermediate calculationsand round your answer to 2 decimal places, e.g.,32.16.) c. What is the current value of the annuity? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)
| A five-year annuity of ten $5,900 semiannual payments willbegin 9 years from now, with the first payment coming 9.5 yearsfrom now. The discount rate is 8 percent compunded monthly. |
| a. | What is the value of this annuity five years from now?(Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.) |
| b. | What is the value three years from now?(Do not round intermediate calculationsand round your answer to 2 decimal places, e.g.,32.16.) |
| c. | What is the current value of the annuity? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.) |
Related questions
| Suppose you are going to receive $12,800 per year for six years. The appropriate interest rate is 7.7 percent.
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B.
What is the present value if the payments are an annuity due? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
C. Suppose you plan to invest the payments for six years. What is the future value if the payments are an ordinary annuity? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
D.
| Suppose you plan to invest the payments for six years. What is the future value if the payments are an annuity due? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
5.
| If you put up $52,000 today in exchange for a 6.50 percent, 16-year annuity, what will the annual cash flow be? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| Annual cash flow | $ |
6.
| Investment X offers to pay you $4,900 per year for nine years, whereas Investment Y offers to pay you $7,000 per year for six years. |
| Calculate the present value for Investment X and Y if the discount rate is 4 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) |
| Present value | |
| Investment X | $ |
| Investment Y | $ |
| Calculate the present value for Investment X and Y if the discount rate is 14 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) |
| Present value | |
| Investment X | $ |
| Investment Y | $ |
7.
| An investment offers $5,400 per year for 10 years, with the first payment occurring one year from now. |
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| If the required return is 5 percent, what is the value of the investment? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| Present value | $ |
| What would the value be if the payments occurred for 35 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| Present value | $ |
| What would the value be if the payments occurred for 65 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| Present value | $ |
| What would the value be if the payments occurred forever? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| A 20-year annuity pays $1,950 per month, and payments are made at the end of each month. If the interest rate is 11 percent compounded monthly for the first ten years, and 7 percent compounded monthly thereafter, what is the present value of the annuity? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
