Janice and Terry Van Dyke have decided to establish a quarterly ordinary annuity of $8,000 for the next ten years at 8% annual interest compounded quarterly. How much should they invest in a lump sum now to provide the stream of payments? | Click the icon to view the present value of a $1.00 ordinary annuity table.
Janice and Terry Van Dyke have decided to establish a quarterly ordinary annuity of $8,000 for the next ten years at 8% annual interest compounded quarterly. How much should they invest in a lump sum now to provide the stream of payments? | Click the icon to view the present value of a $1.00 ordinary annuity table.
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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Transcribed Image Text:Janice and Terry Van Dyke have decided to establish a quarterly ordinary annuity of $8,000 for the next ten years at 8% annual interest compounded quarterly. How
much should they invest in a lump sum now to provide the stream of payments?
| Click the icon to view the present value of a $1.00 ordinary annuity table.
They should invest $
(Round to the nearest cent as needed.)
Transcribed Image Text:Rate per period
Periods
2%
3%
4%
5%
6%
7%
8%
9%
10%
12%
1
0.980
0.971
0.962
0.952
0.943
0.935
0.926
0.917
0.909
0.893
2
1.942
1.913
1.886
1.859
1.833
1.808
1.783
1.759
1.736
1.690
3
2.884
2.829
2.775
2.723
2.673
2.624
2.577
2.531
2.487
2.402
4
3.808
3.717
3.630
3.546
3.465
3.387
3.312
3.240
3.170
3.037
5
4.713
4.580
4.452
4.329
4.212
4.100
3.993
3.890
3.791
3.605
6
5.601
5.417
5.242
5.076
4.917
4.767
4.623
4.486
4.355
4.111
7
6.472
6.230
6.002
5.786
5.582
5.389
5.206
5.033
4.868
4.564
8
7.325
7.020
6.733
6.463
6.210
5.971
5.747
5.535
5.335
4.968
8.162
7.786
7.435
7.108
6.802
6.515
6.247
5.995
5.759
5.328
10
8.983
8.530
8.111
7.722
7.360
7.024
6.710
6.418
6.145
5.650
11
9.787
9.253
8.760
8.306
7.887
7.499
7.139
6.805
6.495
5.938
12
10.575
9.954
9.385
8.863
8.384
7.943
7.536
7.161
6.814
6.194
13
11.348 10.635
9.986
9.394
8.853
8.358
7.904
7.487
7.103
6.424
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