A rich aunt has promised you $2 comma 000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 3% larger than the last payment. She will continue to show this generosity for 15 years, giving a total of 15 payments. If the interest rate is 5%, what is her promise worth today? The present value of the aunt's promise is

Q: Your business associate who owes you $8000 offers to pay you either $6640 now or else to pay you 5…

A: Yearly installment (A) = $1600 n = 5 years r = 5.8% compounded continuously

Q: decided to deposit ISK 200, 000. deposit into a bank account, annually, for the next 5 years, which…

A: Annual deposit=ISK 200000Interest rate for 2 years=8%Interest rate for 3 years=6%

Q: A rich aunt has promised you 6000 one year from today. In​ addition, each year after​ that, she has…

A: This question can solved on the basis on Net Present Value Method (NPV)

Q: Your uncle is about to retire, and he wants to buy an annuity that will provide him with $95,000 of…

A: Annual Payment (P) = $95,000Interest rate (r) = 4.70% or 0.047Number of years (n) = 20Payment timing…

Q: Max purchases a lot for $300,000. Max will pay $25,000 dollars at the end of each year. the interest…

A: Using excel NPER function

Q: will receive a perpetuity of $34,000 per year forever, while curly will receive the same annual…

A: Present value is the equivalent value of money today of the future money based on the time value of…

Q: Your friend offers to pay you an annuity of $2,500 at the end of each year for 3 years in return for…

A: Annual Payment (P) = $2,500Interest rate (r) = 5.5% or 0.055Number of years (n) = 3

Q: Your uncle gives you $92,000 as a gift. Rather than give you a lump-sum, your uncle structures the…

A: Giftable amount (PV) is $92000 Annunity per year (PMT) is $16,250 Interest rate is 12% To Find:…

Q: How much would you have at the end of 5 years if you choose to take the $ 6640 offer now, and you…

A: N = 5 years Investment = 6640 Interest rate = 5.8% compounded continuously

Q: A retiree wants to purchase an annuity that will provide her with end-of-year payments for the next…

A: Number of year end payment = 30 Years Rate of return = 5.5% First annual payment = $ 15,000 Annual…

Q: Your aunt promises to gift you $1,500 now, $1,700 one year from now, $1,900 two years from now, and…

A: The future value is reflective of the value of cash flows in the future after compounding them using…

Q: A rich aunt has promised you $5,000 one year from today. In addition, each year after that, she has…

A: An annuity refers to a stream of cash flows occurring on a periodic basis. The periodicity can be…

Q: You got $80,000 as a gift. Rather than give you a lump sum, you are given the gift as an annuity…

A: An annuity is a financial contract in which an individual makes a series of payments or deposits to…

Q: Jane has been offered a choice between a lump sum payment of $100,000 today or an annuity thatpays…

A: Present value of cash plays a very vital role to calculate any figure which are estimated for the…

Q: Ms. Perez wants to invest in a savings account with interest rate of 9% per year. She decided to…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: If your trust fund promises to pay you $25, 000 on your 24th birthday (6years from today) and earns…

A: Present Value is the current worth of an amount to be received in future. To calculate the present…

Q: Maria has leased an auto for 3 years at $200/month. If the money is worth 5%/year compounded…

A: To find the present value of this lease, we need to use the formula for the present value of an…

Q: payments with the first payment being made at the end of this year. If the payments are to grow by…

A: This is present value of growing of annuity problem can be solved using formula.Loan…

Q: Mary wants to receive a payout of $1500 per month for 20 years. 1) How much money must be in the…

A: Using excel PMT and PV function

Q: How much will be in Sarah’s account in 10 years if she deposits $5000 in an account that pays 10%…

A: the balance in the account will be the amount deposited along with the interest accrued over the…

Q: You owe your parents $23,000 (in present day dollars) and want to repay them in equal amounts the…

A: Present value factor of 8.9% compounded monthly for 4 years will be = 1/(1+8.9%/12)12 x4..=…

Q: Cheryl is setting up a payout annuity with her bank. She wants to receive a payout of $1200 per…

A: Using excel PV function

Q: Find the future value of each using the future value of an ordinary annuity formula.  Shelly…

A: Using Future value function in excel

Q: n investor knows that she will need £20,000 in ten years and looks at possible savings plans. The…

A: More is the compounding than more is the effective interest rate and more is the future value of the…

Q: Your mother has an annuity that will give her monthly payments for 13 years. She tell you it is…

A: The present value of annuity due is calculated with the series of annuity payments which is…

Q: Your grandparents would like to establish a trust fund that will pay you and your heirs $175,000 per…

A: The problem is asking us to find the present value of a perpetuity. A perpetuity is a type of…

Q: Your rich uncle is going to give you $88,000 in five years time. What is the value of that money in…

A: Given: interest rate - 10% FV - 88000 n - 5 years