2) Dennis Reynolds, 20, with a constant force of mortality, has a complete lifeexpectancy of 125 years. He purchases a discrete 10-year temporary life annuityimmediate. Assuming v = 0.90 and the annuity pays $80,000 per year what is theAPV of this annuity?A. 451,952В. 502,169С. 506,202D. 531,952E. None of above.

Given: Let's consider that v=0.90, n=10, and A=$80,000 per year and determine the APV of this…

Answered: 2) Dennis Reynolds, 20, with a constant…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Suppose that an annuity produces one payment per year for 17 years, starting on July 4, 1776. If the nominal rate of interest is 8.1 percent convertible semiannually, and the present value of the annuity on July 4, 1775 is 3700 dollars, how much is the annual payment? Thank you!
Use the following tables to calculate the present value of a $261,000 @ 6%, 6-year bond that pays $15,660 interest annually, if the market rate of interest is 7%. Round to the nearest dollar. Present Value of $1 ¦ Present Value of Annuity of $1 Periods 5 % 6 % 7 % 10 % ¦ Periods 5 % 6 % 7 % 10 % 1 .95238 .94340 .93458 .90909 ¦ 1 .95238 .94340 .93458 .90909 2 .90703 .89000 .87344 .82645 ¦ 2 1.85941 1.83339 1.80802 1.73554 3 .86384 .83962 .81630 .75131 ¦ 3 2.72325 2.67301 2.62432 2.48685 4 .82270 .79209 .76290 .68301 ¦ 4 3.54595 3.46511 3.38721 3.16987 5 .78353 .74726 .71299 .62092 ¦ 5 4.32948 4.21236 4.10020 3.79079 6 .74622 .70496 .66634 .56447 ¦ 6 5.07569 4.91732 4.76654 4.35526 7 .71068 .66506 .62275 .51316 ¦ 7 5.78637 5.58238 5.38929 4.86842 8 .67684 .62741 .58201 .46651 ¦ 8 6.46321 6.20979…
2. An annuity provides a payment of n at the end of each year for n years. What is the present value of the annuity if the annual effective rate of interest is 1/n?
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4. Calculating Annuity Present Value. An investment offers $7,000 per year for 15 years, with the first payment occurring 1 year from now. If the required return is 9 percent, what is the value of the investment? What would the value be if the payments occurred for 40 years? For 75 years? Forever?
6) a. b. C. d. What is the present value of $15,000 received today, $2,500 received at the end of each of the next six years and $10,000 received at the end of the 7th year, assuming a required rate of return of 4.50% ? $38,143 $16,899.89 $29,990.22 $35,243
Given: 6 = 0.08; Mortality is uniformly distributed throughout life (DeMoivre) 7th w = 100. Find the APV of a continuous 10-year certain and life annuity to (50). a. 11.43 b. 12.06 c. 9.92 d. 10.03 e. 10.99
If the interest rate is zero, the future value interest factor equals a. 2.00 b. -1.00 c. 1.00 d. 0.00

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