At an annual effective rate of interest i=3%, find the PV of a perpetuity-immediate with annual payments of 30, 40, 50, 60, a) 9520 b) 10800 c) 11254 d) 12111 e) 12500 Find the PV of a perpetuity-immediate with payments of 1 in year 1, 2 in year 2, 3 in year 3,..., and 20 in year 20. After 20, the payments remain constant at 20. The annual effective rate of interest i = 4%. a) 280.75 b) 319.14 c) 353.35 d) 427.01 e) 450.00

At an annual effective rate of interest i=3%, find the PV of a perpetuity-immediate with annual payments of 30, 40, 50, 60, a) 9520 b) 10800 c) 11254 d) 12111 e) 12500 Find the PV of a perpetuity-immediate with payments of 1 in year 1, 2 in year 2, 3 in year 3,..., and 20 in year 20. After 20, the payments remain constant at 20. The annual effective rate of interest i = 4%. a) 280.75 b) 319.14 c) 353.35 d) 427.01 e) 450.00

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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5. What is the future value of a 5-year ordinary annuity with annual payments of $200, evaluated at a 15 percent interest rate? * O a) $ 670.44 O b) $ 842.91 O c) $1,522.64 d) $1,348.48 e) None of the above
A 5-year annuity has a series of payments 1, 2, 3, 2, 1 with the first payment made at time t = 0 and each subsequent payment occurring one year later than the previous. The present value (i.e. value at time 0) of this annuity is 8.41 using an effective annual interest rate of i. A 6-year annuity has a series of payments 1, 2, 3, 3, 2, 1 with the first payment made at time t = 0 and each subsequent payment occurring one year later than the previous. Find the present value (i.e. value at time 0) of the 6-year annuity at the interest rate i.
Find the PV of a 26-year annuity-immediate with payments of 1, 2, 3, ..., 26 at an annual effective rate of interest ii = 7%. Possible Answers A 113.2 B 114.7 C 115.9 D 116.8 E 117.5
Assume that an annuity has an annual cash flow of $375 in Years 11 through 20 (10 cash flows). Also assume that the nominal annual interest rate that is appropriate for this annuity is 9 percent (compounded daily, and using a 365-day basis year). Given this information, determine the value o this annuity at Year 0. $ 838.62 $1,205.43 $960.89 $1,083.16 O $716.35
What is the future value (at the end of 10 years) of an annuity that pays $700 a quarter over 10 years with the payments invested at 6.6% per annum (assume compounding matches payment periods, common assumption for such problems)? (enter your answer in the following format 123456.78) Answer:
2) A 15-Year annuity is purchased for 10,000 with level annual payment 800. what is the effective annual interest rate?
Find the payment that should be used for the annuity due whose future value is given. Assume that the compounding period is the same as the payment period. $17,000; quarterly payments for 19 years; interest rate 9.3% The payment should be $ (Round to the nearest cent as needed.)
A 20-year annuity X has annual payments of $10,000 at the beginning of each year for 10 years, then annual payments of $20,000 at the beginning of each year for the next 10 years. A perpetuity Y has payments of Q at the end of each year for 10 years, then payments of 2Q at the end of each year thereafter. The present values of X and Y are equal when calculated using an annual effective interest rate of 5%. Find Q.
Given the following information, calculate the rate of return. price = $501.88time to maturity = 10 yearsannual payment = $100type = ordinary annuity
Find the future value of an annuity due of $1,500 semiannually for six years at 7% annual interest compounded semiannually. What is the total investment? What is the interest? E Click the icon to view the Future Value of $1.00 Ordinary Annuity table. The future value is $. (Round to the nearest cent as needed.)
A perpetuity-due with annual payments consists often level payments of X followed by a series of increasing payments. Beginning with the eleventh payment, each payment is 1.5% larger than the preceding payment. Using an annual effective interest rate of 5%, the present value of the perpetuity is 45,000. Calculate X. B C 1,679 E 1,696 1,737 D 1,763 1,781
At an annual effective interest rate of 5%, an annuity immediate with 4N level annual payments of 1000 has a present value of 14,898.13. Determine the fraction of the total present value represented by the first set of N payments and the third set of N payments combined. A. 0.579 B. 0.585 C. 0.614 D. 0.643 E. 0.672

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