If the payments "A" are made twice a year and interest is compounded annually for "n" years, name this annuity. 1 2 n- 2 n- 1 !! MATHalino.com А A A A A A (Contingent or Certain) (Simple or General) (Ordinary or Annuity Due)

If the payments "A" are made twice a year and interest is compounded annually for "n" years, name this annuity. 1 2 n- 2 n- 1 !! MATHalino.com А A A A A A (Contingent or Certain) (Simple or General) (Ordinary or Annuity Due)

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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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. A.future valueB. ordinary annuity C.sinking fundD. present value of an annuityE.amortization (b) Answer the question. (Round your answer to the nearest cent.)
The difference between an ordinary annuity and an annuity due is that each of the payments of the annuity due earns interest for one additional year (period). * True False
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the amount of time needed for the sinking fund to reach the given accumulated amount. (Round your answer to two decimal places.) $295 monthly at 5.8% to accumulate $25,000.
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. (i = interest rate, and n = number of years) (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar amount.) Present Value Annuity Amount i = n = 1. ? $2,400 8% 5 2. 533,082 140,000 ? 4 3. 583,150 180,000 9% ? 4. 530,000 75,502 ? 8 5. 235,000 ? 10% 4
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. (i=interest rate, and n=number of years)(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of 1$ and PVAD of $1) (Use appropriate factor (s) from the tables provided. Round your final answers to nearest whole dollar amount.) Present Value Annuity Amount i= n= ______________ $ 2,600 8% 5 507,866 135,000 _____ 4 661,241 170,000 9% ____ 540,000 78,557 _____ 8 230,000 _____________ 10% 4
please answer activity 1.2 2nd and 3rd question only, thanks.
9. Examine the time line for Now the annuity shown. 250 (1.015) 250 (1.015) 250 (1.015) E 250 (1.015)23 250 (1.015) a) What is the duration of this annuity? How can you tell? b) Determine the annual rate of interest and the number of compounding periods per year. c) Determine the present value of this annuity. d) Determine the total interest earned. ANSWER 9. a) 6 years b) 6%; 4 compounding periods per year c) $5007.60 d) $992.40 Time (3-month periods) 1 2 250 250 250 250 250 3 23 24 H-H
Present value of an annuity Consider the following cases. Case ◄AUA- E Amount of annuity $ 12.000 55.000 700 140.000 22.500 Interest rate 12 20 5 10 Period (years) a. Calculate the present value of the annuity assuming that it is (1) An ordinary annuity, mu 9 7 b. Compare your findings in parts al 1) and a(2). All else being identical, which of annuity-ordinary or annuity due-is preferable? Explain why. Personal Finance Problem Tume value-Annuities - Marian Kirk wishes to select the better of two 10-year annuines, C and D. Annuity C is an ordinary annuity of $2,500 per year for 10 years. Annuity D is an annuity due of $2,200 per year for 10 years. delen future value of both annuities at the end of year 10, assuming that
A perpetuity of $1 each year, with the first payment due immediately, has a present value of $25 at an annual effective rate of i%. The owner exchanges it for another perpetuity with the first payment due immediately and subsequent payments due at two year intervals. What should the payment of the second perpetuity be, in order to keep the same interest rate, i%, and the same present value? A B с D E Less than $1.90 At least $1.90, but less than $1.94 At least $1.94, but less than $1.98 At least $1.98, but less than $2.02 $2.02 or more
Estimating the annual interest rate with an ordinary annuity. Fill in the missing annual interest rates in the following table for an ordinary annuity stream. Number of Payments or Years Annual Interest Rate Future Value Annuity Present Value 10 ? $0.00 $600.00 $2,386.09 18 ? $13,278.73 $354.57 $0.00 40 ? $0.00 $1,872.79 $40,000.00 60 ? $266,564.09 $500.00 $0.00 Number of Payments or Years Annual Interest Rate Future Value Annuity Present Value 10 nothing% (Round to two decimal places.) $0.00 $600.00 $2,386.09 18 nothing% (Round to two decimal places.) $13,278.73 $354.57 $0.00 40 nothing% (Round to two decimal places.) $0.00 $1,872.79 $40,000.00…
What's the future value of a 3-year $500 ordinary annuity, if the quoted interest rate is 11.35%, compounded semiannually? Note that the annuity payments are annual but that the compounding is semiannual. Round your final answer to 2 decimal places. $1,729.62 O $1.757.72 $1,888.60 O $1,777.10 O $1.676.69
Calculate the present value of the following annuities, assuming each annuity payment is made at the end of each compounding period. (FV of $1. PV of $1. FVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.) 1. 2. 3. Annuity Payment $ 5,600 10,600 4,600 Annual Rate Interest Compounded Semiannually 9.0% 10.0% Quarterly 11.0% Annually Period Invested 3 years 2 years 5 years Present Value of Annuity

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