An cashflow has a first payment of P 1,000 and increases by P 100 each period until payments reach P 1,500. All payments are credited at the end of each period. There are 10 further payments of P 1,500. Find the present value at 6.5% effective per period. Hint: Write this as a sum of an increasing annuity and a deferred annuity but be cautious that first payment P is not equal to the periodic increase Q in payment.

An cashflow has a first payment of P 1,000 and increases by P 100 each period until payments reach P 1,500. All payments are credited at the end of each period. There are 10 further payments of P 1,500. Find the present value at 6.5% effective per period. Hint: Write this as a sum of an increasing annuity and a deferred annuity but be cautious that first payment P is not equal to the periodic increase Q in payment.

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 12MC: (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest...

See similar textbooks

Similar questions

A cashflow has a first payment of P1,000 and increases by P100 each period until payments reach P1,500. All payments are credited at the end of each period. There are 10 further payments of P1,500. Find the present value at 6.5% effective per period. Hint: Write this as a sum of an increasing annuity and a deferred annuity but be cautious that first payment P is not equal to the periodic increase Q in payment.FOLLOW THE HINTSHOW MANUAL SOLUTIONSDO NOT ROUND OFF
An annuity pays $145.00 each period for 10 periods. For these cash flows, the appropriate discount rate/period is 4.5%. What is the future value of this annuity in period. kindly use formula do use excel
For each of the following situations involving annuities, solve for the unknown. Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (/= interest rate, and n= number of years) Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) 1. $ 2 3 4. 15 Present Value Answer is complete but not entirely correct. Annuity Amount 2.200 145,000 190,000 72.523 45,787 8,784 558,865 480,945 520,000 240,000 8% 1.0% 9% 2.5% 10% n= 5 4 30 8 4
Use the formula for the future value of an ordinary annuity to solve for n when A = $6,000, the monthly payment r = $550 and annual intrest r = 8.5%
Directions: Determine the kind of annuity used in the following situations. Then, solve the problem. Show complete solutions. What equal payments at the beginning of each 2 months for 4 years will discharge a debt of P180,000 due now if the interest rate is 18.48% compounded every 2 months? a. Kind of annuity: b. Computation:
This problem demonstrates the dependence of an annuity's future value on the size of the periodic payment. Suppose a fixed amount will be invested at the end of each year and that the invested funds will earn 5.3% compounded annually. What will be the future value of the investments after 15 years if the periodic investment is: (Do not round intermediate calculations and round your final answers to 2 decimal places.) Investment Future Value a. $2,300 per year $ b. S3, 300 per year $ c. S4, 300 per year $
Suppose you are going to receive $11,000 per year for 8 years. The appropriate interest rate is 11 percent per year. Requirement 1: What is the present value of the payments if they are in the form of an ordinary (a)annuity (cash flow starts at the end of the first compounding period)? (Click to select) (b) What is the present value if the payments are an annuity due (cash flow starts at the beginning of the first compounding period)? (Click to select) Requirement 2: (a)Suppose you plan to invest the payments for 8 years, what is the future value if the payments are an ordinary annuity? (Click to select) (b)Suppose you plan to invest the payments for 8 years, what is the future value if the payments are an annuity due? (Click to select)
A complex annuity makes the following payments. However, the cash flow in Period 4 is missing. The total present value of all cash flows including the missing cash flow in Period 4 is $674.58. The appropriate discount rate / period is 10%. Find the missing cash flow. 0 1 100 2 100 3 100 4 ??? 5 100 6 100
A. Directions: Read the following annuity problem. Fill in the blanks in the statements that follow. A loan of P 30,000 is to be repaid monthly for 5 years that will start at the end of 4 years. If interest rate is 12% converted monthly, how much is the monthly payment? a) Type of annuity illustrated in the problem is a b) The total number of payments is c) The number of conversion periods in the period of deferred is d) The interest rate per period is annuity. e) The present value of the loan is
Find the present value of an annuity stream in which the first payment of $268 is received 8 years from today, and thereafter 8 additional payments are paid to you each year. The size of the annuity payments will decrease in size in each year (i.e. g < 0), at an annual rate of g = -4.5%. Use an annual discount rate of 3.1%.
Suppose you are going to receive $12,700 per year for six years. The appropriate interest rate is 7.6 percent. a-1. What is the present value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2.What is the present value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-1. Suppose you plan to invest the payments for six years. What is the future value if the payments are an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-2. Suppose you plan to invest the payments for six years. What is the future value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Provide manual solutions for below problem. In an ordinary annuity (uniform series of payments) if the nominal rate of interest is 8% compounded quarterly for 6 years. 1. Compute the value of the capital recovery factor. 2. Compute the value of the sinking fund factor. 3. Compute the value of the present worth factor. Ans. 1. 0.052871 2. 0.032871 3. 18.914