2. Annuities - Johan, a sophomore management student, receives a call from an insurance agent who believed that Johan is an older man ready to retire from teaching. He talks to him about several annuities that she would buy that would guarantee her an annual fixed income. The annuities are as follows: Initial Payment into Annuity (at t = 0) Duration of Annuity (Years) Amount of Money Received Year per Annuity 12 $8,500 $7,000 $8,000 A $50,000 25 $60,000 20 C $70,000 If Johan could earn 11 percent on his money by placing it in a savings account, should he place it instead in any of the annuities? Which ones, if any? Why?

2. Annuities - Johan, a sophomore management student, receives a call from an insurance agent who believed that Johan is an older man ready to retire from teaching. He talks to him about several annuities that she would buy that would guarantee her an annual fixed income. The annuities are as follows: Initial Payment into Annuity (at t = 0) Duration of Annuity (Years) Amount of Money Received Year per Annuity 12 $8,500 $7,000 $8,000 A $50,000 25 $60,000 20 C $70,000 If Johan could earn 11 percent on his money by placing it in a savings account, should he place it instead in any of the annuities? Which ones, if any? Why?

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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son.3
ook ences Chris Seals has just given an insurance company $62,525. In return, she will receive an annuity of $7,458 for 12 years. a. At what rate of return must the insurance company invest this $62,525 to make the annual payments? (Use a Financial calculator to arrive at the answers. Round the final answer to 3 decimal places.) Rate of return b. What rate of return is required if the annuity is payable at the beginning of each year? (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.) Rate of return
Corey received a 30 year loan of $345,000 to purchase a house. The interest rate on the loan was 5.00% compounded semi-annually. Question 5 of 6 a. What is the size of the monthly loan payment? $0.00 Round to the nearest cent SUBMIT QUESTION SAVE PROGRESS
2. (a) A college student, Amy, decides to fund a retirement account with $2000 per year for 8 years, with the first deposit made one year from today. The rate of return will be 10%. How much will she have in her account when she retires in 40 years? (b) Amy’s friend, Dacio, decides he will start funding his retirement account 8 years from now (first payment in 9 years). He then will invest $2000 each year for 32 years. If his rate of return is 10%, how much will he have when he retires in 40 years?
5-23. (Solving for Present Value with Annuities) Angus McDonald, a third-year accounting student studying in Scotland, receives a call from an insurance agent, who believes Angus is an older man ready to retire from teaching. He talks to him about several annuities that he could buy that would guarantee him an annual fixed income. The annuities are as follows: INITIAL PAYMENT INTO ANNUITY (AT I = 0) DURATION OF ANNUITY (YEARS) 12 AMOUNT OF MONEY RECEIVED PER YEAR ANNUITY $40,000 $7.500 B $70,000 $8,500 25 C $80,000 $9,500 20 If Angus could earn 12 percent on his money by placing it in a savings account, should he place it instead in any of the annuities? Which ones, if any? Why? 5-24. (Loan amortization) Mr. Dayvos Bay has just purchased a new house for $300,000, He paid $30,000 down payment and agreed to pay the rest over the next 25 years in 25 equal end-of-year payments plus 10 percent compound interest over the unpaid balance. What will these equal payments be? 5-25. (Solving for…
Chapter 4, Question 9. Please see attached
Ann and Tom want to establish a fund for their grandson's college education. What lump sum must they deposit at a 10% annual interest rate, compounded quarterly, in order to have $30,000 in the fund at the end of 10 years? Question content area bottom Part 1 They should deposit $enter your response here. (Round up to the nearest cent.)
To create a college fund, a parent makes a sequence of 20 yearly deposits of $4000 each year in a saving account, on which interest is compounded annually at 2.8%. Find the amount of annuity.
st K (Related to Checkpoint 6.2) (Present value of an ordinary annuity) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent who believes that Nicki is an older woman who is ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her a fixed annual income. The annuities are as follows: Purchase Price of the Annuity (At t= 0) Amount of Money Received Per Year $6,500 $6,000 $9,000 Annuity A $50,000 B $40,000 C $60,000 (Click on the icon in order to copy its contents into a spreadsheet.) EXZE Duration of the Annuity (Years) 16 12 10 Nicki could earn 8percent on her money by placing it in a savings account. Alternatively, she could place it in any of the above annuities. Which annuities in the table above. if anv. will earn Nicki a higher return than investing in the savings a. If Nicki could earn 8 percent on her money, what is the present value of annuity A with $6,500 payments per year…
Rodriguez: Attempt 1 to have $120,000 in 15 years for their children's college education. How much should be paid. semiannually into an account paying 6.8% compounded semiannually? Problem: A newborn child receives a one time $20,000 gift toward college from her grandparents. How much will the $20,000 be worth in 17 years if it is invested at 7% compounded quarterly? Problem: If you buy a computer directly from the manufacturer for $2,500 and agree to repay it in 48 equal installments at 1.25% interest per month on the Q Search ly 1. A F 2. A=P 3. A- PA
Asap plz
A couple plans to save their child's college education. What principal must be deposited by the parents when their child is born in order to have 39,000$ when the child reaches the age of 18? Assume the money earns 8%!interest, compounded quarterly. Round answer to two decimal places.

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