An insurer needs to make the following annuity payments into a private pension fund: £771 paid at the beginning of each year for the first 5 years and then £1097 paid at the beginning of each year for the next 8 years and then £802 paid at the beginning of each year for the following 9 years. Calculate the amount of capital accumulated in the fund by the end of the last year, given that the rate of interest during this period is: 4.0% pa effective for the first 8 years and then 8.9% pa effective thereafter. Express your answer in £s to 2 decimal places. Answer: Check

An insurer needs to make the following annuity payments into a private pension fund: £771 paid at the beginning of each year for the first 5 years and then £1097 paid at the beginning of each year for the next 8 years and then £802 paid at the beginning of each year for the following 9 years. Calculate the amount of capital accumulated in the fund by the end of the last year, given that the rate of interest during this period is: 4.0% pa effective for the first 8 years and then 8.9% pa effective thereafter. Express your answer in £s to 2 decimal places. Answer: Check

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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Find the periodic payments PMT necessary to accomulate the given account in an annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $20,000 in a fund paying 2% per year, with quarterly payments for 20 years. PMT = $
A special whole life immediate annuity on a life aged 45 pays an yearly amount of 5000 for the first 5 years, then 15000 for the subsequent 5 years and 10000 thereafter. What is the EPV of this annuity.
Find the periodic payments PMT necessary to accumulate the given amount in an annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $90,000 in a fund paying 3% per year, with monthly payments for 10 years, if the fund contains $30,000 at the start
A 6-year term insurance policy has an annual premium of $500, and at the end of 6 years, all payments and interest are refunded. What lump-sum deposit is necessary to equal this amount if you assume an interest rate of 2.5% compounded annually? (a) State the type. future value present value of an annuity sinking fund amortization ordinary annuity (b) Answer the question. (Round your answer to the nearest cent.) $
To save for graduate school, a student invests $1470 semiannually in an ordinary annuity with 3% interest compounded semiannually. Determine the accumulated amount in the student's annuity after 15 years.
The present value of an ordinary annuity is determined on the last day of the first annuity period. on the first day of the first annuity period. on the last day of the last annuity period. immediately before the first cash flow in the series occurs.
An insurer needs to make the following annuity payments to an individual: £744 paid at the beginning of each year for the first 5 years and then £654 paid at the beginning of each month for the next 5 years and then £798 paid at the beginning of each quarter for the following 8 years. Assuming a nominal rate of interest of 2.7% pa convertible quarterly throughout the entire period, how much total fund the insurer needs to hold today in order to meet these payments? Express your answer in £s to 2 decimal places. (correct answer: 53269.67) (need working out)
A pension plan must make total disbursements of $4.7 million, $6.7 million, $5.7, $3.0 and $1.0 million annually for the next five years, respectively. The fund makes these payments twice a year, paying half of each year's total amount six months into the year and the remaining half at the end of the year.Find the duration of the pension obligations if spot rates are flat at 8%. Group of answer choices 1.91 3.86 4.76 2.00 2.17
A life insurance company advertises that $50,000 will purchase a 20-year annuity paying $402.80 at the end of each month. What effective rate of return does the annuity investment earn?
On January 1, 2018, you deposited $5,500 in a savings account. The account will earn 8 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 7 years? 2. What is the total interest for the 7 years? 3. How much interest revenue did the fund earn in 2018 and in 2019? Show Transcribed Text
For the sinking fund, use Table 12-1 to calculate the amount (in $) of the periodic payments needed to amount to the financial objective (future value of the annuity). (Round your answer to the nearest cent.) Sinking Fund Payment $ 27658 x Payment Frequency every year Time Period (years) 14 Interest Nominal Rate (%) Compounded annually 8 Future Value (Objective) $750,000
Question: Assume that Kathy is to make annual investments of P600,000 for three years. The interest for this investment was pegged at 12%. The investment is made at the beginning of each year. What is the future value of this annuity due?

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