8. Ken acquired his sister's share of their business by agreeing to make payments of $4000 at the end of each year for12 years. If the payments are deferred for 3 years and money is worth 5% compounded quarterly, what is the cashvalue of his sister's share of the business?

Deferred annuity refers to a contract payment wherein the account holder is promised to receive a…

Answered: 8. Ken acquired his sister's share of…

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

See similar textbooks

Similar questions

Twins graduate from college together and start their careers. Twin 1 invests $2500 at the end of each year for 10 years only (until age 34) in an account that earns 9%, compounded annually. Suppose that twin 2 waits until turning 40 to begin investing. How much must twin 2 put aside at the end of each year for the next 25 years in an account that earns 9% compounded annually in order to have the same amount as twin 1 at the end of these 25 years (when they turn 65)? (Round your answer to the nearest cent.)
Alice Adams invests $3,000 at 9% compounded semiannually for 8 years. a)How much will she have after 8 years?b)How much interest will she have earned?
Done Present value interest factor of $1 per period at i% for n periods, PVIF(i,n). 5.5% 9.0% 9.5% 1 0.9754 0.9515 0.9057 0.9705 0.8880 0.9420 0.9145 0.9327 0.9010 0.9657 0.9609 0.9561 0.5847 0.3505 0.9513 0.8963 0.9466 0.9419 0.8874 0.5897 0.5568 0.8489 0.8364 0.9372 0.8787 0.8240 0.7254 0.6810 0.6394 0.8118 0.7579 0.7077 0.6611 0.6178 0.9326 0.8700 0.8613 0.5643 0.5303 0.5400 0.5051 0.5167 0.4810 0.9279 0.7999 0.6905 0.6419 0.5553 0.5969 0.8528 0.6736 0.7880 0.9233 0.5767 0.5339 0,4945 0.9187 0.8444 0.7764 0.6572 0.5572 0.4732 0.5134 0.4581 0.4363 0.4155 0.3957 0.8360 0.9141 0.7649 0.6412 0.5874 0.5384 0.4936 0.2120 0.4528 0.9096 0.8277 0.6255 0.7536 0.5703 0.5202 0.1945 0.4746 0.4333 0.9051 0.6730 0.6103 0.5537 0.5026 0.4564 0.4146 0.3769 0.1784 0.1628 0.5954 0.5375 0.1803 0.1637 0.1487 7.5% 10.0% 8.0 % 8.5% 6.5% 7.0% 4.5% 6.0% 5.0% 2.5% 3.0% 3.5% 4.0% 2.0% 1.5% 1.0% Period 0.5% 0.9390 0.9346 0.9302 0.9259 0.9217 0.9174 0.9132 0.9091 0.9950 0.9901 0.9852 0.9804 0.9756 0.9709 0.9662…
Four years ago, Leroy invested $12,600.00. Today, he has $20,700.00. If Leroy earns the same annual rate implied from the past and current values of his invsetment, then in how many years from today does he expect to have exactly $50,600.00 O 7.20 years (plus or minus 0.05 years) 7.57 years (plus or minus 0.05 years) O 6.25 years (plus or minus 0.05 years) 11.20 years (plus or minus 0.05 years) None of the above is within .05 percentage points of the correct answer
Mr. Bill purchased a new house for 110,000. He paid 20,000 down and agreed to pay the rest over the next 30 years in 30 equal end of the year payments plus 12 percent compound interest on the unpaid balance. What will these equal payments be?

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

8. Ken acquired his sister's share of their business by agreeing to make payments of $4000 at the end of each year for 12 years. If the payments are deferred for 3 years and money is worth 5% compounded quarterly, what is the cash value of his sister's share of the business?