Annuities (PV and FV) Annual Amount Deposited 860 Annual Interest Rate 9.2% Deposits are made for each of years 1 - 40. 1. Future value of ordinary annuity. What will these deposits have grown to by end of year 40? A Between 50,000 and 212,000 B Between 212,000 and 253,000 C Between 253,000 and 312,000 D Between 312,000 and 420,000 2. Future value of annuity due What will these deposits have grown to by end of year 40? A Between 50,000 and 227,000 B Between 227,000 and 269,000 C Between 269,000 and 329,000 D Between 329,000 and 420,000 3. Present value of ordinary annuity What are these deposits worth today? A Between 5,000 and 9,400 B Between 9,400 and 10,300 C Between 10,300 and 11,200 D Between 11,200 and 15,000 4. Present value of annuity due What are these deposits worth today? A Between 5,000 and 10,100 B Between 10,100 and 11,100 C Between 11,100 and 12,100 D Between 12,100 and 15,000

Annuities (PV and FV) Annual Amount Deposited 860 Annual Interest Rate 9.2% Deposits are made for each of years 1 - 40. 1. Future value of ordinary annuity. What will these deposits have grown to by end of year 40? A Between 50,000 and 212,000 B Between 212,000 and 253,000 C Between 253,000 and 312,000 D Between 312,000 and 420,000 2. Future value of annuity due What will these deposits have grown to by end of year 40? A Between 50,000 and 227,000 B Between 227,000 and 269,000 C Between 269,000 and 329,000 D Between 329,000 and 420,000 3. Present value of ordinary annuity What are these deposits worth today? A Between 5,000 and 9,400 B Between 9,400 and 10,300 C Between 10,300 and 11,200 D Between 11,200 and 15,000 4. Present value of annuity due What are these deposits worth today? A Between 5,000 and 10,100 B Between 10,100 and 11,100 C Between 11,100 and 12,100 D Between 12,100 and 15,000

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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Amortization schedule Loan amount to be repaid (PV) $25,000.00 Interest rate (r) 11.00% Length of loan (in years) 3 a. Setting up amortization table Formula Calculation of loan payment #N/A Year Beginning Balance Payment Interest Repayment of Principal Remaining Balance 1 2 3 b. Calculating % of Payment Representing Interest and Principal for Each Year Year Payment % Representing Interest Payment % Representing Principal Check: Total = 100% 1 2 3 Formulas Year Beginning Balance Payment Interest Repayment of Principal Remaining Balance 1 #N/A #N/A #N/A #N/A #N/A 2 #N/A #N/A #N/A #N/A #N/A 3 #N/A #N/A #N/A #N/A #N/A b. Calculating % of Payment Representing Interest and Principal for Each Year Year Payment %…
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Part 1: A level annuity pays £300 p.a. payable half-yearly in arrear for 7 years. Find the purchase price for an interest rate of 4% per annum (a) effective, (b) convertible half-yearly, (c) convertible quarterly.
Amortization Schedule Consider a $10,000 loan to be repaid in equal installments at the end of each of the next 5 years. The interest rate is 8%. Set up an amortization schedule for the loan. Round your answers to the nearest cent. Enter "0" if required Year Payment Repayment Interest Repayment of Principal Balance 1 $ $ $ $ 2 $ $ $ $ 3 $ $ $ $ 4 $ $ $ $ 5 $ $ $ $ Total $ $ $ How large must each annual payment be if the loan is for $20,000? Assume that the interest rate remains at 8% and that the loan is still paid off over 5 years. Round your answer to the nearest cent.$ _______ How large must each payment be if the loan is for $20,000, the interest rate is 8%, and the loan is paid off in equal installments at the end of each of the next 10 years? This loan is for the same amount as the loan in part b, but the payments are spread out over twice as many periods. Round your answer to the nearest cent.$ _______Why…
Present Value What is the present value of a $2,800 deposit in year 4 and another $3,300 deposit at the end of year 8 if interest rates are 9 percent?
a. b. C. Annuity Annual Payment Rate $ 124,000 124,000 124,000 Interest Compounded 8% Annually 10% Annually 12% Annually Period Invested 6 years 6 years 6 years Present Value of Annuity
How much more is a perpetuity of $6,000 worth than an annuity of the same amount for 10 years? Assume an interest rate of 9% and cash flows at the end of each year. a. $99,212 b. $34,740 c. $58,097 d. $28,161
Present Value of an Annuity Determine the present value of $170,000 to be received at the end of each of four years, using an interest rate of 5.5%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. c. Why is the present value of the four $170,000 cash receipts less than the $680,000 to be received in the future? The present value is less due to over the 4 years. Exhibit 5 Present Value of $1 at Compound Interest Periods 4% 4%% 5% 5%% 6% 62% 7% 10% 11% 12% 13% 0.96154 0.956940 0.95238 0.94787 0.94340 0.93897 0.93458 0.90909 0.90090 0.89286 0.88496 2 0.92456 0.915730 0.90703 0.89845 0.89000 0.88166 0.87344 0.82645 0.81162 0.79719 0.78315 3 0.88900 0.876300 0.86384 0.85161 0.83962 0.82785 0.81630 0.75131 0.73119 0.71178…
Lepp Complete present value of an ordinary annuity: Note: Round your answer to the nearest cent. Amount of Annuity Expected $ 16,000 Payment Payable Years Quarterly 2 Interest Rate earned 12% Present value
he future value of an ordinary annuity with $200 annual deposits into an account paying 6% interest over the next 10 years will be a. $1,987.56 b. $2,636.16 c. $2,794.37 d. $2,120
Construct an annuity table showing the deposits, interests, and balances for the saving plan below (compulsory to show the working steps to get the interest value): a) $350 is invested in an increasing annuity at the end of every 6 months for 3 years. The account pays 10.25% interest rate compounded semiannually. Period Beginning Interest Deposit Ending balance (Every 6 months) Balance 1 $0.00 $0.00 $350.00 $350.00 3 4 (Copy this table to your answer script)
Amount of annuity expected $900 Payment Annually Time 4 years Interest rate 6% Present value (amount needed now to invest to receive annuity) $3,118.59 Check the correctness of annuity payment by completing the following table. Note: Round the answers the nearest cent. Opening balance ces Interest Annuity Closing balance Year 1 Year 2 Year 3 Year 4 3,118.59

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