A perpetuity with a present value of $25,000 today yields cash flows of $100 per month. The first cash flow comes in one month from today. What is the required return for the perpetuity in APR?

Q: Find the present value (at time zero) of a perpetuity that pays $10,000 each year with its first…

A: The cash flows that are started at a specified period instead of immediately after the investment…

Q: Prepare a time diagram for the present value of a four-year annuity due of $200. Assume an interest…

A:

Q: At the end of each month for the next ten years you will receive cash flows of $75.  If the…

A: Present value of annuity = 75{1-(1+0.072)^-120}/0.072

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: Consider an ordinary simple perpetuity with monthly payments. If the first payment happens in one…

A: Perpetuity is the type of annuity that goes on forever, that is, perpetuity has no end and is for an…

Q: An annuity with a cash value of ​$12,000 pays ​$2,050 at the beginning of every six months. The…

A: Annuity:  An annuity is the series of payments which is received or paid for a certain period of…

Q: If $84,000 is invested in an annuity that earns 5.2%, compounded quarterly, what payments will it…

A: Investment (PV) = $84000 Interest rate = 5.2% Quarterly interest rate (r) = 5.2%/4 = 1.30% Period =…

Q: An annuity with a cash value of $9,600 pays $2,190 at the beginning of every six months. The…

A: Annuities are equal and fixed regular payments based on the time of cash flow and the interest 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: The monthly compounded interest rate is 10%. What is the effective annual interest rate and what is…

A: Compound = n = Quarterly = 4Interest rate = r = 10%Cash Flow = cf = $100Time = t = 3 Years

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: How much money do you need now to set up a perpetuity that pays $2,000 at the end of each quarter if…

A: In finance, there are two types of series of cash flows, i.e., an annuity, and perpetuity. An…

Q: A perpetuity with a present value of $60,000 today yields cash flows of $1,200 per quarter. The…

A: Solution: An equal amount received for a perpetual period, is called perpetuity.  So, present value…

Q: Monthly payments of $150 are paid into an annuity beginning on January 31, with a yearly interest…

A: An annuity is a financial product designed to provide a stream of periodic payments over a specified…

Q: Suppose payments were made at the end of each quarter into an ordinary annuity earning interest at…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: A perpetuity will pay $736 per year, starting five years after the perpetuity is purchased. (The…

A: Present value refers to the current worth or value of a future sum of money or cash flow. It is the…

Q: A 20-year annuity pays $1,200 per month, and payments are made at the end of each month. The…

A: The concept of time value of money will be used and applied here.   An annuity is a stream of…

Q: At the end of each month for the next ten years you will receive cash flows of $50.  If the…

A: Annuity refers to the contract between an insurer and the insurance company in which a fixed…

Q: What are the annual cash flows (in $) of an annuity for 19 years, which costs $48,783 today, if the…

A: The sequence of periodic payments or receipts that are made as part of an annuity contract over time…

Q: after 4 years is $60,000, what was the size of each payment?

A: The size of each payment is $3218.97

Q: A perpetuity with a present value of $80,000 today yields cash flows of $2,500 per quarter. The…

A: For an unlimited amount of time, the stream of cash flows that continues is known as perpetuity. A…

Q: nuity with yearly payments of 674 that’s compounded annually with an interest rate of 5.4% will be…

A: Future value of the annuity includes the amount being deposited over the period of time and amount…

Q: Compute the present value of an annuity of $621 per year for 25 years, given a discount rate of 6…

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

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.