5-21. (Compound annuity) What is the accumulated sum of each of the following LO2 streams of payments? a. $500 a year for 10 years compounded annually at 5 percent b. $100 a year for 5 years compounded annually at 10 percent c. $35 a year for 7 years compounded annually at 7 percent d. $25 a year for 3 years compounded annually at 2 percent 5-22. (Present value of an annuity) What is the present value of each of the following annuities? a. $2,500 a year for 10 years discounted back to the present at 7 percent b. $70 a year for 3 years discounted back to the present at 3 percent c. $280 a year for 7 years discounted back to the present at 6 percent d. $500 a year for 10 years discounted back to the present at 10 percent 5-23. (Solving for Present Value with Annuities) Nicki Johnson, a sophomore mechani- cal engineering student, receives a call from an insurance agent, who believes that Nicki is an older woman ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her an annual fixed income. The annuities are as follows: ANNUITY A B C INITIAL PAYMENT INTO ANNUITY AMOUNT OF MONEY RECEIVED (AT=0) PER YEAR DURATION OF ANNUITY (YEARS) $50,000 $8,500 12 $60,000 $7,000 25 $70,000 $8,000 20 If Nicki could earn 11 percent on her money by placing it in a savings account, should she place it instead in any of the annuities? Which ones, if any? Why? MyLab
5-21. (Compound annuity) What is the accumulated sum of each of the following LO2 streams of payments? a. $500 a year for 10 years compounded annually at 5 percent b. $100 a year for 5 years compounded annually at 10 percent c. $35 a year for 7 years compounded annually at 7 percent d. $25 a year for 3 years compounded annually at 2 percent 5-22. (Present value of an annuity) What is the present value of each of the following annuities? a. $2,500 a year for 10 years discounted back to the present at 7 percent b. $70 a year for 3 years discounted back to the present at 3 percent c. $280 a year for 7 years discounted back to the present at 6 percent d. $500 a year for 10 years discounted back to the present at 10 percent 5-23. (Solving for Present Value with Annuities) Nicki Johnson, a sophomore mechani- cal engineering student, receives a call from an insurance agent, who believes that Nicki is an older woman ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her an annual fixed income. The annuities are as follows: ANNUITY A B C INITIAL PAYMENT INTO ANNUITY AMOUNT OF MONEY RECEIVED (AT=0) PER YEAR DURATION OF ANNUITY (YEARS) $50,000 $8,500 12 $60,000 $7,000 25 $70,000 $8,000 20 If Nicki could earn 11 percent on her money by placing it in a savings account, should she place it instead in any of the annuities? Which ones, if any? Why? MyLab
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 20E
Related questions
Question
Please help with these questions.
Transcribed Image Text:5-21. (Compound annuity) What is the accumulated sum of each of the following LO2
streams of payments?
a. $500 a year for 10 years compounded annually at 5 percent
b. $100 a year for 5 years compounded annually at 10 percent
c. $35 a year for 7 years compounded annually at 7 percent
d. $25 a year for 3 years compounded annually at 2 percent
5-22. (Present value of an annuity) What is the present value of each of the following
annuities?
a. $2,500 a year for 10 years discounted back to the present at 7 percent
b. $70 a year for 3 years discounted back to the present at 3 percent
c. $280 a year for 7 years discounted back to the present at 6 percent
d. $500 a year for 10 years discounted back to the present at 10 percent
5-23. (Solving for Present Value with Annuities) Nicki Johnson, a sophomore mechani-
cal engineering student, receives a call from an insurance agent, who believes that
Nicki is an older woman ready to retire from teaching. He talks to her about several
annuities that she could buy that would guarantee her an annual fixed income. The
annuities are as follows:
ANNUITY
A
B
C
INITIAL
PAYMENT INTO
ANNUITY
AMOUNT OF
MONEY RECEIVED
(AT=0)
PER YEAR
DURATION
OF ANNUITY
(YEARS)
$50,000
$8,500
12
$60,000
$7,000
25
$70,000
$8,000
20
If Nicki could earn 11 percent on her money by placing it in a savings account, should
she place it instead in any of the annuities? Which ones, if any? Why?
MyLab
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you