5. Gwen and David split an inheritance. The inheritance consists of 2n e: rear payments of X. Gwen will receive the first set of n payments, and Dav 1 receive the second set of n payments. If the present value of the inheritan calculated under an annual effective interest rate of 9%, the proportion present value going to David is 0.262 283 745 7. If the present value of t eritance is calculated under an annual effective interest rate of 4%, wh portion of the present value goes to Gwen?

5. Gwen and David split an inheritance. The inheritance consists of 2n e: rear payments of X. Gwen will receive the first set of n payments, and Dav 1 receive the second set of n payments. If the present value of the inheritan calculated under an annual effective interest rate of 9%, the proportion present value going to David is 0.262 283 745 7. If the present value of t eritance is calculated under an annual effective interest rate of 4%, wh portion of the present value goes to Gwen?

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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Similar questions

Drew receives an inheritance that pays him $53,000 every three months for the next two years. Which of the following is closest to the present value (PV) of this inheritance if the interest rate is 8.3% (EAR)? A. $310,421 B. $388,027 C. $465,632 D. Use BA. II where applicable
1. Louisa is 72 years old. She purchased an annuity in January of 2021 that will pay her $1,500 per month for the rest of her life. Louisa paid $200,000 for the annuity. What is the expected value of Louisa’s annuity? a. $18,000 b. $21,900 c. $200,000 d. $262,800 e. Not able to be determined from this information
Nan and Neal are twins. Nan Invests $5,000 at age 25 while Neal invests the same amount at age 30. Nan houses a retably eaten duten annual interest rate of 7%. Both twins plan to retire at age 65 and neither adds nor withdrews funds prior to remental would to have the sa money as Nan by their retirements, what annual interest rate must his investment eam? OA8.17 % OB.8.04% OC.8.66% O D. 8.00% OE. None of these are correct
You have just inherited $248,876. You plan to save this money and continue to live oll the money that you are eaming in your curent job. If you can invest the money in a bond that payn 8.92 percent interent annually, how long will it be before your inheritance in worth $1,438,337?
32. Ellen purchased a life annuity with a 10-year period certain and lived for 30 years. If Ellen's life expectancy was 20 years at the time she bought the annuity, when would her periodic payments cease? a. at the end of her life b. at the end of 10 years c. at the end of 20 years d. when the amount placed under the annuity had been exhausted
Which of the following describes a single premium variable annuity? A]Karen retires from her job and buys a variable annuity the next day which will beginto pay her monthly income starting next month. B}Bob's father buys a variable annuityfor him at age 15.The semi -annual premiumare $500. C}Jean inherits $20,000 and purchases a variable annuity with it.Itbwill begin to pay her regualr income in 15 years. D} Tom puts $100 a month into a variable annuity, which will pay him income at age 60.
Consider an inheritance that pays the beneficiary an annuity of $500 that begins immediately (an annuity due) and then annually in year 1 through year 17 (for a total of 18 years) with one exception - the payment in year 12, and only 12, is not $500 but $0. Using an interest rate of 3%, determine the present value of this cash flow stream.
36. One year prior to his death, Bobby lends his son $250,000 at a 10% interest rate per year to purchase land. As part of the promissory note, the promissory note will cancel upon Bobby's death. At the time of death no payments were made and Bobby did not seek payment from his son. Assuming this is John's only asset, what is the value of his gross estate? a. $0 b. $25,000 c. $250,000 d. $275,000
V1
Every three years, D will pay Mr. J 5,000 at 8% rate to settle his loan. Mr. D will use which formula to compare with cash payment? A. Future value of IB. FV of AnnuityC. Present Value of ID.
Age 60 61 62 63 65 66 67 64 68 69 80 81 82 70 71 83 84 85 86 87 88 89 90 72 73 74 75 76 77 78 79 Table I (Single Life Expectancy) (For Use by Beneficiaries) Life Expectancy 27.1 26.2 25.4 24.5 23.7 22.9 22.0 21.2 20.4 19.6 18.8 18.0 17.2 16.4 15.6 14.8 14.1 13.3 12.6 11.9 11.2 10.5 9.9 9.3 8.7 8.1 7.6 7.1 6.6 6.1 5.7 Age 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120+ Life Expectancy 5.3 4.9 4.6 4.3 4.0 3.7 3.4 3.2 3.0 2.8 2.6 2.5 2.3 2.2 2.1 2.1 2.1 2.0 2.0 2.0 2.0 2.0 1.9 1.9 1.8 1.8 1.6 1.4 1.1 1.0
MENU = a. Your grandmother left you an inheritance in the form of a trust. The trust agreement states that you are to receive R2 500 on the first day of each year, starting immediately and continuing for fifty years. What is the value of this inheritance today if the applicable discount rate is 6,20%? O b. III d. R66 811,30 R40 706,92 O C.R39 942,42 myExams R49 942,42

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