Apollo Enterprises has been awarded an insurance settlement of $3,000 at the end of each 6 month period for the next 13 years. (Round your answers to the nearest cent.) (a) As the accountant, calculate how much (in $) the insurance company must set aside now at 6% interest compounded semiannually to pay this obligation to Apollo (b) How much (in $) would the insurance company have to invest now if the Apollo settlement was changed to $1,500 at the end of each 3 month period for 13 years and the insurance company earned 8% interest compounded quarterly? (c) How much (in $) would the insurance company have to invest now if the Apollo settlement was paid at the beginning of each 3 month period rather than at the end?
Apollo Enterprises has been awarded an insurance settlement of $3,000 at the end of each 6 month period for the next 13 years. (Round your answers to the nearest cent.) (a) As the accountant, calculate how much (in $) the insurance company must set aside now at 6% interest compounded semiannually to pay this obligation to Apollo (b) How much (in $) would the insurance company have to invest now if the Apollo settlement was changed to $1,500 at the end of each 3 month period for 13 years and the insurance company earned 8% interest compounded quarterly? (c) How much (in $) would the insurance company have to invest now if the Apollo settlement was paid at the beginning of each 3 month period rather than at the end?
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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Apollo Enterprises has been awarded an insurance settlement of $3,000 at the end of each 6 month period for the next 13 years. (Round your answers to the nearest cent.)
(a) As the accountant, calculate how much (in $) the insurance company must set aside now at 6% interest compounded semiannually to pay this obligation to Apollo
(b) How much (in $) would the insurance company have to invest now if the Apollo settlement was changed to $1,500 at the end of each 3 month period for 13 years and the insurance company earned 8% interest compounded quarterly?
(c) How much (in $) would the insurance company have to invest now if the Apollo settlement was paid at the beginning of each 3 month period rather than at the end?
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Follow-up Question
Apollo Enterprises has been awarded an insurance settlement of $3,000 at the end of each 6 month period for the next 14 years. (Round your answers to the nearest cent.)
(a)
As the accountant, calculate how much (in $) the insurance company must set aside now at 6% interest compounded semiannually to pay this obligation to Apollo.
$
(b)
How much (in $) would the insurance company have to invest now if the Apollo settlement was changed to $1,500 at the end of each 3 month period for 14 years and the insurance company earned 8% interest compounded quarterly?
$
(c)
How much (in $) would the insurance company have to invest now if the Apollo settlement was paid at the beginning of each 3 month period rather than at the end?
$
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