1. Consider an annuity that pays £500 at the end of each year for 7 years. The annual effective interest rate is 7% p.a.Compute the present value of this cashflow£ 数字Enter an answer correct to 2 decimal placesCompute the effective duration of this cashflow数字Enter an answer correct to 2 decimal places2. A payment of £60 will be made in 10 years.The annual effective interest rate is 6% p.a.Compute the convexity of this payment数字Enter an answer correct to 2 decimal places

Compute the present value of the cash flow:Given:Cash flow per year: £500Number of years: 7Annual…

Answered: 1. Consider an annuity that pays £500…

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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PLEASE, WRITE THE SOLUTION ON PAPER, EXPLAINING THE ENTIRE PROCESS, STEP BY STEP
2. A payment of £30 will be made in 10 years. The annual effective interest rate is 7 % p.a. Compute the convexity of this payment
You are paid £2,500 annually for 6 years, with the first payment due in one year and the last payment due in 6 years. What is the present value of all these payments using an interest rate of 10%? £ Enter an answer correct to 2 decimal places.
Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $300 per month for 10 years, if the account earns 2% per year and if there is to be $10,000 left in the annuity at the end of the 10 years PV = $
K Find the future value of the ordinary annuity. Interest is compounded annually. R=24,000; i = 0.045; n=38 The future value of the ordinary annuity is $ (Do not round until the final answer. Then round to the nearest dollar as needed.)
You are paid £1,000 annually for 7 years, with the first payment due in one year and the last payment due in 7 years. What is the present value of all these payments using an interest rate of 2%? £ 数字 Enter an answer correct to 2 decimal places.
Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $800 per month for 15 years, if the account earns 5% per year and if there is to be $10,000 left in the annuity at the end of the 15 years PV = $
Suppose the interest rate is 10.2 % APR with monthly compounding. What is the present value of an annuity that pays $ 119 every 6 months for 6 years? Question content area bottom Part 1 The 6 -month effective interest rate is 5.209 %. (Round to three decimal places.) Part 2 The present value is $enter your response here . (Round to the nearest cent.)
Suppose that you have inherited an annuity with the parameters given below. What is the present value of this annuity? Round your final answer to two decimals First payment: First payment occurs: Constant payment growth rate: Payment frequency: Cost of Capital: Term: Present value 424.00 2 years from now 1% Annually Annual 8% Annually 18 Years
Assume time is measured in years and today is time 0. A payment stream is due to start in 7 years' time from today. 12 annual payments in advance, each of amount 99, will be made. Thus the first payment is made at time 7. Assuming the effective rate of interest is 4% per annum, calculate the value at time 0 of the payment stream. Give your answer to 2 decimal places.
i. Find the annual payments for an ordinary annuity and an annuity due for 12 years with a PV of $1,000 and an interest rate of 10%. Round your answers to the nearest cent. Annual payment for ordinary annuity: $ Annual payment for annuity due: $ j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 10%. Year 1 Payment $100 2 $300 $500 3 Round your answers to the nearest cent. PV of investment: $ FV of investment: $ k. Five banks offer nominal rates of 9% on deposits, but A pays interest annually, B pays semiannually, C pays quarterly, D pays monthly, and E pays daily. Assume 365 days in a year. 1. What effective annual rate does each bank pay? If you deposit $3,000 in each bank today, how much will you have in each bank at the end of 1 year? 2 years? Round your answers to two decimal places. EAR FV after 1 year FV after 2 years Nominal rate $ $ Payment A A % B $ $ % B B C % $ 2. If the TVM is the only consideration, what nominal…

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