For the sinking fund, use Table 12-1 to calculate the amount (in $) of the periodic payments needed to amount to the financial objective (future value of the annuity). (Roundyour answer to the nearest cent.)Sinking FundPaymentTime PeriodNominalInterestPaymentFrequencyFuture Value(years)Rate (%)Compounded(Objective)every year148annually$350,000Enter a number. Periods2%1%1%2%3%4%5%6%7%8%Periods11.000001.000001.000001.000001.000001.000001.000001.000001.000001.00000122.005002.010002.015002.02000 2.030002.040002.050002.060002.070002.08000233.015023.030103.045223.06040 3.090903.121603.152503.183603.214903.24640344.030104.060404.090904.12161 4.183634.246464.310134.374624.439944.5061145.050255.101015.152275.20404 5.309145.416325.525635.637095.750745.866606.075506.152026.229556.30812 6.468416.632986.801916.975327.153297.335936.77.105887.213547.322997.43428 7.662467.898298.142018.393848.654028.92280788.141418.285678.432848.58297 8.892349.214239.549119.8974710.2598010.636638.99.182129.368539.559339.75463 10.15911 10.58280 11.02656 11.4913211.9779912.487569.1010.2280310.46221 10.70272 10.94972 11.46388 12.00611 12.57789 13.1807913.8164514.48656101111.27917 11.56683 11.86326 12.16872 12.80780 13.48635 14.20679 14.9716415.7836016.64549111212.33556 12.68250 13.04121 13.41209 14.19203 15.02581 15.91713 16.8699417.8884518.97713121313.39724 13.80933 14.23683 14.68033 15.61779 16.62684 17.71298 18.8821420.1406421.49530131414.46423 14.94742 15.45038 15.97394 17.08632 18.29191 19.59863 21.0150722.5504924.2149214

Sinking fund is the amount kept aside for paying a loan or debt. Sinking fund enables the business…

Answered: 1 to calculate the amount (in $) of the…

1 to calculate the amount (in $) of the periodic payments needed to amount to the financial objective (future value of the annuity).

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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Question

For the sinking fund, use Table 12-1 to calculate the amount (in $) of the periodic payments needed to amount to the financial objective (future value of the annuity). (Round
your answer to the nearest cent.)
Sinking Fund
Payment
Time Period
Nominal
Interest
Payment
Frequency
Future Value
(years)
Rate (%)
Compounded
(Objective)
every year
14
8
annually
$350,000
Enter a number.

Periods
2%
1%
1%
2%
3%
4%
5%
6%
7%
8%
Periods
1
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1
2
2.00500
2.01000
2.01500
2.02000 2.03000
2.04000
2.05000
2.06000
2.07000
2.08000
2
3
3.01502
3.03010
3.04522
3.06040 3.09090
3.12160
3.15250
3.18360
3.21490
3.24640
3
4
4.03010
4.06040
4.09090
4.12161 4.18363
4.24646
4.31013
4.37462
4.43994
4.50611
4
5.05025
5.10101
5.15227
5.20404 5.30914
5.41632
5.52563
5.63709
5.75074
5.86660
6.07550
6.15202
6.22955
6.30812 6.46841
6.63298
6.80191
6.97532
7.15329
7.33593
6.
7
7.10588
7.21354
7.32299
7.43428 7.66246
7.89829
8.14201
8.39384
8.65402
8.92280
7
8
8.14141
8.28567
8.43284
8.58297 8.89234
9.21423
9.54911
9.89747
10.25980
10.63663
8.
9
9.18212
9.36853
9.55933
9.75463 10.15911 10.58280 11.02656 11.49132
11.97799
12.48756
9.
10
10.22803
10.46221 10.70272 10.94972 11.46388 12.00611 12.57789 13.18079
13.81645
14.48656
10
11
11.27917 11.56683 11.86326 12.16872 12.80780 13.48635 14.20679 14.97164
15.78360
16.64549
11
12
12.33556 12.68250 13.04121 13.41209 14.19203 15.02581 15.91713 16.86994
17.88845
18.97713
12
13
13.39724 13.80933 14.23683 14.68033 15.61779 16.62684 17.71298 18.88214
20.14064
21.49530
13
14
14.46423 14.94742 15.45038 15.97394 17.08632 18.29191 19.59863 21.01507
22.55049
24.21492
14

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Many assets provide a series of cash inflows over time; and many obligations require a series of payments. When the payments are equal and are made at fixed intervals, the series is an annuity. There are three types of annuities: (1) Ordinary (deferred) annuity, (2) Annuity due, and (3) Growing annuity. One can find an annuity's future and present values, the interest rate built into annuity contracts, and the length of time it takes to reach a financial goal using an annuity. Growing annuities are often used in the area of financial planning. Their analysis is more complex and often easier solved using a financial spreadsheet, so we will limit our discussion here to the first two types of annuities. The future value of an ordinary annuity, FVAN, is the total amount one would have at the end of the annuity period if each payment (PMT) were invested at a given interest rate and held to the end of the annuity period. The equation is: FVAN= PMT Each payment of an annuity due is compounded…
Select all the statements that apply to an ordinary annuity. The end of the annuity's term does not coincide with the last payment. The beginning of the annuity's term coincides with the first payment. The beginning of the annuity's term occurs one payment interval before the first payn The end of the annuity's term coincides with the last payment. Need help? Review these concept resources. (1]) Read About the Concept Rate your confidence to submit your answer.
May I ask for an explanation of the question for a better understanding. Thank you! Which of the following statements is NOT TRUE? a. In an annuity due, payments occur at the beginning of the period. b. A perpetuity will never mature at any point in future. c. The present value of a perpetuity can be calculated. d. In an ordinary annuity, payments occur at the beginning of the period.
The deferral period lasts from the original deposit date (lump sum) up until the start of the term for the annuity. True 6. False
Questions attached
An [Select] is a sequence of equal period payments. If payments are made at the end of each time interval, the annuity is called an [Select]
Instructions: Show COMPLETE solution/proof with correct answer. All elements should be included and drawn correctly and; all elements should be labeled with reference and value.
use the formula that is applicable.
Show that the present value of annuaity due is one period accumulated value of the present value of annuity immediate.
Distinguish between the present value of $1 and the present value of an annuity due of $1.
Explain the relationship between Table 2, Present Value of $1, and Table 4, Present Value of an OrdinaryAnnuity of $1.

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