Question 10 of 30A 30-year annuity is arranged to pay off a loan taken out today at a 5% annual effective interest rate. The first payment of the annuityis due in ten years in the amount of 1,000. The subsequent payments increase by 500 each year.Calculate the amount of the loan.A) 58,283B) 61,197C) 64,021OD) 64,257E) 69,211

Here,FirstPayment due in 10 years is $1,000Increase in every subsequent payment is $500Annual…

Answered: A 30-year annuity is arranged to pay…

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

A perpetuity-due with annual payments consists often level payments of X followed by a series of increasing payments. Beginning with the eleventh payment, each payment is 1.5% larger than the preceding payment. Using an annual effective interest rate of 5%, the present value of the perpetuity is 45,000. Calculate X. B C 1,679 E 1,696 1,737 D 1,763 1,781
The compounding periods and the payment periods are the same for an annuity and for an amortization. Determine the present value of the annuity that will pay the given periodic payments. (Round your final answer to two decimal places.) Periodic payments of $2400 annually for 13 years. The interest is 4% compounded annually.
In the provided formulas, P is the deposit made at the end of each compounding period, r is the annual interest rate of the annuity in decimal form, n is the number of compounding periods per year, and A is the value of the annuity after t years. Periodic Deposit $1500 at the end of every three months Rate 7.25% compounded quarterly Time…
An annuity-due makes payments of $15 every other year, with the first payment beginning immediately. The annuity-due makes ten payments. The nominal annual interest rate compounded semiannually is 5%. Calculate the present value of the annuity due. a. 100.0958 O b. 93.2775 O c. 66.7310 d. 124.3700 O e. 133.4620
Monthly payments of $75 are paid into an annuity beginning on January 31, with a yearly interest rate of 9%, compounded monthly. Add the future values of each payment to calculate the total value of the annuity on September 1. On September 1, the value of the annuity will be $_____________?
A 15-payment annual annuity has its first payment in nine years. If the payment amount is $1,400 and the interest rate is 7 percent, what is the most you should be willing to pay today for this investment?A) $5,825.11B) $12,751.08C) $6,416.67D) $7,421.24E) $6,935.74
A 13-year annuity pays $1,400 per month, and payments are made at the end of each month. The interest rate is 7 percent compounded monthly for the first six years and 5 percent compounded monthly thereafter. What is the present value of the annuity?
A company will receive payments of $1,500 per year for the next four years under a subscription contract. The first payment will be made at the beginning of the contract. Assuming an annual interest rate of 3% is appropriate, the present value of an ordinary annuity is 3.71710 x $1,500 = $5,576, and the present value of an annuity due is 3.82861 x $1,500 = $5,743. Which amount must the company record for this sale in accordance with generally accepted accounting principles (GAAP) if collection is reasonably assured? $0 $5,576 $6,000 $5,743
Find the future value of each annuity due. Then determine how much of this value is from contributions and how much is from interest. Payments of $220 were made at the beginning of each quarter for 15 years at 4.6% compounded quarterly. The future value of the annuity due is $19077.23. The amount from contributions is $_______ The amount from interest is $ ________ do not round until the final answer.
Find the present value of an annuity with annual payments of $1,100.00 compounded at the end of each year for 8 years after being deferred for 3 years, if money is worth 6.3%, compounded annual. The present value would be $ . (Round to 2 decimal places.)
a. Use the appropriate formula to find the value of the annuity. b. Find the interest. Time 20 years Rate Periodic Deposit $1000 at the end of each year 3% compounded annually
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the accumulated amount of the annuity. (Round your answer to the nearest cent.) $2500 annually at 7% for 10 years.

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