Following is a table for the present value of $1 at compound interest:Year 6%10%10.9430.9090.8900.8260.8400.7510.7920.68350.7470.621Following is a table for the present value of an annuity of $1 at compound interest:Year 6%10%12%1 0.9430.9090.8932 1.8331.7361.6903 2.6732.4872.4023.4653.1703.03754.2123.7913.605Using the tables provided, the present value of $9,186.00 (rounded to the nearest dollar) to be received at the end of each of the next 4 years, assuming an earnings rate of 12%, isOa. $9,186Ob. $22,0652344Oc. $27,898Od. $33,11612%0.8930.7970.7120.6360.567

The question is related to Time Value of Money. The Present Value is calculated with the help of…

3 Year 6% 10% 1 0.943 0.909 2 0.890 0.826 0.840 0.751 4 0.792 0.683 5 0.747 0.621 Following is a table for the present value of an annuity of $1 at compound interest: Year 6% 1 0.943 1.833 2.673 3.465 4.212 12% 0.893 1.690 2.402 3.037 5 3.605 Using the tables provided, the present value of $9,186.00 (rounded to the nearest dollar) to be received at the end of each of the next 4 years, assuming an earnings rate of 12%, is Oa. $9,186 Ob. $22,065 Oc. $27,898 Od. $33,116 2 12% 0.893 0.797 0.712 0.636 0.567 3 4 10% 0.909 1.736 2.487 3.170 3.791

3 Year 6% 10% 1 0.943 0.909 2 0.890 0.826 0.840 0.751 4 0.792 0.683 5 0.747 0.621 Following is a table for the present value of an annuity of $1 at compound interest: Year 6% 1 0.943 1.833 2.673 3.465 4.212 12% 0.893 1.690 2.402 3.037 5 3.605 Using the tables provided, the present value of $9,186.00 (rounded to the nearest dollar) to be received at the end of each of the next 4 years, assuming an earnings rate of 12%, is Oa. $9,186 Ob. $22,065 Oc. $27,898 Od. $33,116 2 12% 0.893 0.797 0.712 0.636 0.567 3 4 10% 0.909 1.736 2.487 3.170 3.791

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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a. b. C. Annuity Annual Payment Rate $ 124,000 124,000 124,000 Interest Compounded 8% Annually 10% Annually 12% Annually Period Invested 6 years 6 years 6 years Present Value of Annuity
Following is a table for the present value of $1 at compound interest: Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Following is a table for the present value of an annuity of $1 at compound interest: Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 Using the tables provided, the present value of $57,000 (rounded to the nearest dollar) to be received 3 years from today, assuming an earnings rate of 6%, is a.$71,501 b.$152,361 c.$47,880 d.$57,000
Use the following Annuity Table for questions 1 through 6. Future Value of Ordinary Annuity of 1 Period 5% 6% 8% 10% 12% 11.000001.000001.000001.000001.00000 22.050002.060002.080002.100002.12000 33.152503.183603.246403.310003.37440 44.310134.374624.506114.641004.77933 55.525635.637095.866606.105106.35285 66.801916.975327.335927.715618.11519 78.142018.393848.922809.4871710.08901 89.549119.8974710.6366311.4358912.29969 911.0265611.4913212.4875613.5794814.77566 1012.5778913.1807914.4865615.9374317.54874 Present Value of an Ordinary Annuity of 1 Period 5% 6% 8% 10% 12% 1.95238.94340.92593.90909.89286 21.859411.833391.783261.735541.69005 32.723252.673012.577102.486852.40183 43.545953.465113.312133.169863.03735 54.329484.212363.992713.790793.60478 65.075694.917324.622884.355264.11141 75.786375.582385.206374.868424.56376 86.463216.209795.746645.334934.96764 97.107826.801696.246895.759025.32825 107.721737.360096.710086.144575.65022 Use the following…
Following is a table for the present value of $1 at compound interest: Year 6% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Following is a table for the present value of an annuity of $1 at compound interest: Year 6% 10% 1 0.943 0.909 2 1.833 1.736 3 2.673 2.487 4 3.465 3.170 4.212 3.791 10% 12% 0.893 1.690 2.402 3.037 5 3.605 Using the tables provided, the present value of $15,007 (rounded to the nearest dollar) to be received 4 years from today, assuming an earnings rate of 10%, is Oa. $11,886 Ob. $47,572 Oc. $10,250 Od. $15,007
Estimating the annual interest rate with an ordinary annuity. Fill in the missing annual interest rates in the following table for an ordinary annuity stream: Number of Payments or Years 10 19 25 80 Annual Interest Rate % (Round to two decimal places.) % (Round to two decimal places.) % (Round to two decimal places.) % (Round to two decimal places.) Future Value $0.00 $12,286.30 $0.00 $1,435,078.21 C Annuity Present Value $580.00 $444.01 $1,985.57 $450.00 $2,298.49 $0.00 $37,000.00 $0.00
Use the table below to answer the following questions: Period 4 567 8 9 10 11 Present Value of an Annuity of 1 4% Future Value of an Annuity of 1 5% 5% 8% 10% 4% 8% 10% 3.6299 3.5460 3.3121 3.1699 4.2465 4.3101 4.5061 4.6410 4.4518 4.3295 3.9927 3.7908 5.4163 5.5256 5.8666 6.1051 5.2421 5.0757 4.6229 4.3553 6.6330 6.8019 7.3359 7.7156 6.0021 5.7864 5.2064 4.8684 7.8983 8.1420 8.9228 9.4872 5.7466 5.3349 9.2142 9.5491 10.6366 11.4359 7.4353 7.1078 6.2469 5.7590 10.5828 11.0266 12.4876 13.5795 8.1109 7.7217 6.7101 6.1446 12.0061 12.5779 14.4866 15.9374 8.7605 8.3064 7.1390 6.4951 13.4864 14.2068 16.6455 18.5312 6.7327 6.4632 Bobby receives alimony payments every 6 months and the next payment is tomorrow. Median homes go for $950,000 and he wants to save $190,000 in 4 years. How much money should Bobby put away into an investment each time he receives alimony payments if he can get a 8% return a year? $35,593 O $31,624 O $23,131 O $46,262
7. Present Value of a Perpetuity Determine the present value of each of the following perpetuities. Part Annual CF Interest Rate A $34,000 B $90,000 C $6,000 D $60,000 8% 10% 6% 5%
Below is a table for the present value of $1 at Compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Below is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 Using the tables above, what is the present value of $6,573.00 (rounded to the nearest dollar) to be received at the end of each of the next 4 years, assuming an earnings rate of 12%? a.$19,962 b.$23,696 c.$6,573 d.$15,788
For each of the following annuities, calculate the present value. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Present Value Annuity Payment $ $ $ $ 1,950 1,265 11,455 29,900 Years 7 9 16 24 Interest Rate 8% 7 9 11
What is the present value of an ordinary annuity that pays $1,000 per year for 4 years, assuming the annual discount rate is 7 percent? a. $3,051.58 b. $762.90 c. $3,624.32 d. $3,738.32 e. $3,387.21
Present value of an Annuity of $1 in Arrears Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943 0.926 0.909 0.893 0.877 2 1.886 1.833 1.783 1.736 1.690 1.647 3 2.775 2.673 2.577 2.487 2.402 2.322 4 3.630 3.465 3.312 3.170 3.037 2.914 5 4.452 4.212 3.993 3.791 3.605 3.433 6 5.242 4.917 4.623 4.355 4.111 3.889 7 6.002 5.582 5.206 4.868 4.564 4.288 8 6.733 6.210 5.747 5.335 4.968 4.639 9 7.435 6.802 6.247 5.759 5.328 4.946 10 8.111 7.360 6.710 6.145 5.650 5.216 Lucas Company is considering a project with an initial investment of $530,250 in new equipment that will yield annual net cash flows of $95,000, and will be depreciated at $75,750 per year over its seven year life. What is the internal rate of return? a.6% b.14% c.10% d.12% e.8%
Following is a table for the present value of $1 at compound interest: Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Following is a table for the present value of an annuity of $1 at compound interest: Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 Using the tables provided, the present value of $6,000 to be received at the end of each of the next 4 years, assuming an earnings rate of 10%, is Group of answer choices $25,272 $19,020 $20,790 $14,412

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