A one-year annuity that pays $100 semi-annually will starts its payment in 6 months from now. APR is 8 percent compounded semi-annually. a. What is the present value of the annuity? b. What is the effective annual rate? c. Now consider another one-year annuity that makes a “single” payment in a year from now. How much should it pay to the investor if it is equally valuable to the previous annuity?

Q: What is the present value of an ordinary annuity of $1,000 per year for 9 years discounted back to…

A: Present value of annuity payment - it means present value of future annual equal payment made to a…

Q: What amount is required to purchase an annuity that pays $7000 at the end of each quarter for the…

A: The term "annuity" refers to a contract created and offered by financial institutions with the goal…

Q: You may purchase an annuity that will pay you 300000 in income per year starting one year from now…

A: Given, Payment amount (PMT) = 300,000 Number of payments (n) = 22 Interest rate (i) = 4%

Q: Your insurance company offered you an annuity that pays you $100 at the end of each year. The life…

A: GIVEN, A= $100 N=10  R=8%

Q: What is the present value of an annuity that pays $58 per year for 13 years and an additional $1,000…

A: We can make use of the financial calculator to obtain the present value, PV. Inputs: I/Y = rate =…

Q: What is the future value of a 5-year ordinary annuity with annual payments of P200, evaluated at a…

A: Future value refers to the amount of current investment after a certain time at a certain rate of…

Q: what is the present value of the 3 year annuity of $270 if the discount rate is 7% if you have to…

A: The formula to compute present value of annuity as follows:

Q: Find the interest rate that an ordinary annuity pays, if the annuity pays $312 per month with its…

A: An annuity pays regular and constant payments over a period of time. Here the annuity amount is $312…

Q: Find the present value of an annuity of $ 365.00 per month for 26 years at a rate of 3 1/4% interest…

A: Monthly payment (P) = $ 365 Period = 26 Years Number of monthly payments (n) = 26*12 = 312 Annual…

Q: a. What is the amount of the annuity purchase required if you wish to receive a fixed payment of…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: 5. Suppose an annuity at 4% compounded semi-annually will pay $4000 at the end of each 6-month…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: What is the future value of an ordinary annuity of $1,000 per year for 9 years compounded at 10…

A: Given: Annual cash flow (A)=$1000 Number of years (n) =9 years Interest rate(r) = 10% = 0.10

Q: An annuity pays out $20000 per year. Because of inflation, each year one dollar is worth what 0.95…

A: Annuity per year = $20,000Because of inflation, each year 1 dollar is worth what $0.95 was worth of…

Q: Find the future value for the ordinary annuity with the given payment and interest rate. PMT =…

A: PMT = $2000 r = 1.1% per annum = 0.09167% per month n = 6 years = 72 months

Q: How much would you be willing to pay today for an ordinary annuity that makes equal annual payments…

A: An ordinary annuity is the series of an equal payment that is paid or received at each week, month,…

Q: An investor is considering an annuity that pays $40,000 per year for four years.  1. Assuming the…

A: (answer of first 3 parts, please specify if any other part is required) We can compute the present…

Q: If you want to be paid from a 14 year ordinary annuity with a guaranteed rate of 2.208% compounded…

A: In finance, the term annuity represents a sequence of cash flows that contain a fixed payment at…

Q: If the present value of an ordinary, 6- year annuity is $7,200 and inter present value of the same…

A: In ordinary annuity there are payments at the end of period only and in annuity due payments are at…

Q: What’s the present value of a perpetuity that pays $300 per year if the appropriate interest rate is…

A: present value of a perpetuity = Annual payment/Discount rate

Q: What is the future value of a 6%, 10-year ordinary annuity that pays $200 each year?  If this were…

A: The future value of annuity is calculated using the formula below:

Q: A perpetuity will make its first payment in 20 years. The first payment will be $5,000, and future…

A: Perpetuity means a series of infinite numbers of payments of the same size occurs in an equal…

Q: What is the present value of $800 per year annuity at an interest rate of 12%? Hint: the future…

A: An annuity refers to a payment plan that provides periodic payments in exchange for a lump sum…

Q: What is the present value of a four-period annuity of $200 per year that begins two years from today…

A: Annual annuity amount = $200 Time Period = 4 years Discount Rate = 9%

Q: Suppose an annuity at 5% compounded semi-annually will pay $5000 at the end of each 6-month period…

A: The annuity refers to the series of regular payments that last for a specific period of time. The…

Q: What is the present value of a 15 year annuity with the first payment of $65,000 (all payments are…

A: present value of a 15 year annuity with the first payment of $65,000 (all payments are the same…

Q: What is the present value of a ten year annuity whose payment will be $20,000 next year and then…

A: Time = t = 10 YearsPayment = p = $20,000Growth Rate = g = 3%Discount Rate = r = 6.4%

Q: Find the future value of the ordinary annuity. Interest is compounded annually. R=8000; i=0.07; n=15…

A: Future value of ordinary annuity = P x [(1 + i)^n - 1]i   where, P = Annuity amount i = rate of…

Q: What is the present value of a $775 annuity payment over six years if interest rates are 11 percent?

A: In this question we need to compute the present value of annuity payment from below details: Annuity…

Q: You bought an annuity selling at $17,390.08 today that promises to make equal payments at the…

A: Present value of annuity (PV) = $17,390.08 Interest rate (I) = 5% Period (N) = 8 Years Annual…

Q: If the present value of an ordinary, six-year annuity is $8,500 and the interest rates are 9.5…

A: Given: Resent value of Ordinary Annuity = $8500 Interest Rate = 9.5% Time =6 years So, the value of…

Q: Suppose an annuity pays $2000 at the end of each 3 month period for 3.5 years at an interest rate of…

A: given, A = $2000 n = 3.5 r = 4% pa but it is compounded quarterly therefore, frequency of…

Q: Suppose an annuity will pay $14,000 at the beginning of each year for the next 5 years. How much…

A: Annual payment (P) = $14,000 Interest rate (r) = 6.5% Period (n) = 5 Years

Q: If you want to be paid from a 15 year ordinary annuity with a guaranteed rate of 4.277% compounded…

A: Annual payment (C) = $10,000 Period (n) = 15 Years rate (r) = 0.04277 (i.e. 4.277%) Present value or…

Q: a. Calculate the annual cash flows ( annuity payments) from a fixed - payment annuity if the present…

A: Annual cash flows refer to the amount that defines the inflow and outflow of the cash during the…

Q: What's the difference between an ordinary annuity and an annuity due? Why would you prefer to…

A: Note: Interest arate is not provided,hence "i" is taken as 5% for calculation. Same formula can be…

Q: What is the future value of a $590 annuity payment over four years if interest rates are 8 percent

A: An annuity refers to a series of cash flow that occurs on a periodic basis. Here $590 is occurring…

Q: hat is the present value of a perpetuity paying $1500 each year, if the effective annual interest…

A: A perpetuity is a series of uniform cash flows over an indefinite period of time.

Q: Suppose you are going to receive $17,500 per year for five years. The appropriate interest rate is…

A:

Q: present value of an ordinary back to the present at 10 percen as

A: The present value of the annuity can be computed as follows : Calculations for above :

Q: What is the future value​ (FV) of this​ perpetuity, given that the interest rate is 3​%?

A: The future value of an investment forecasts the expected value of an investment at a given future…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.