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What is the present value of $2,225 per year, at a discount rate of 9 percent, if the first payment is received 8 years from now and the last payment is received 23 years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
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- Assume that you must estimate what the future value will be two years from today using the future value of 1 table. (PV of $1, EV of $1. PVA of $1, and FVA of $1) Which interest rate column and number-of-periods row do you use when working with the following rates? (Round percentage answers to 2 decimal places.) Answer is complete but not entirely correct. Number of Periods 1. 12% annual rate, compounded annually 2.8% annual rate, compounded semiannually 3. 12% annual rate, compounded quarterly 4. 12% annual rate, compounded monthly Interest Rate 12.00 2.00 3.00 1.00 % % % % 2 80 24Suppose you are going to receive $11,000 per year for 8 years. The appropriate interest rate is 11 percent per year. Requirement 1: What is the present value of the payments if they are in the form of an ordinary (a)annuity (cash flow starts at the end of the first compounding period)? (Click to select) (b) What is the present value if the payments are an annuity due (cash flow starts at the beginning of the first compounding period)? (Click to select) Requirement 2: (a)Suppose you plan to invest the payments for 8 years, what is the future value if the payments are an ordinary annuity? (Click to select) (b)Suppose you plan to invest the payments for 8 years, what is the future value if the payments are an annuity due? (Click to select)Suppose you just bought an annuity with 12 annual payments of $15,700 at a discount rate of 11.75 percent per year. a. What is the value of the investment at the current interest rate of 11.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What happens to the value of your investment if interest rates suddenly drop to 6.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What happens to the value of your investment if interest rates suddenly rise to 16.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a. Present value at 11.75 percent b. Present value at 6.75 percent $ 124,187.88 153,795.59 c. Present value at 16.75 percent $ 97,472.81
- At a growth (interest) rate of 24 percent annually, how long will it take for a sum to double? To triple? Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)Investment X offers to pay you $5,800 per year for eight years, whereas Investment Y offers to pay you $7,900 per year for five years. Use Appendix D. (Round "PV Factor" to 3 decimal places. Round the final answers to 2 decimal places.) Calculate the present value for Investment X and Y If the discount rate is 5%. Investment X Investment Y Present value Investment X Investment Y 14 Calculate the present value for Investment X and Y If the discount rate is 15%. Present value M PAYour answer is incorrect. Sheridan Company is considering investing in an annuity contract that will return $33,500 annually at the end of each year for 15 years. Click here to view the factor table. What amount should Sheridan Company pay for this investment if it earns an 10% return? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, e.g. 25.25.) Sheridan Company should pay $ eTextbook and Media Save for Later SUPP Attempts: 2 of 3 used Submit Answer
- What is the future value of a 6%, 5-year ordinary annuity that pays $450 each year? Do not round intermediate calculations. Round your answer to the nearest cent. If this were an annuity due, what would its future value be? Do not round intermediate calculations. Round your answer to the nearest centIf you put $1,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in 7 years? Round the answer to the nearest cent. Round FV-factor to three decimal places or use the Appendix A . (Hint: Use the future value formula.) $ How much interest will you earn during the 7 years? Round the answer to the nearest cent. $ If you put $1,000 at the end of each year into a savings account that pays interest at the rate of 3 percent a year, how much would you have after 7 years? Use the Appendix B . Round the answer to the nearest cent. Round FV-factor to three decimal places. $What's the present value, when interest rates are 8.5 percent, of a $135 payment made every year forever? ( round your answer to 2 decimal places.)
- What is the future value of a 7%, 5-year ordinary annuity that pays $650 each year? Do not round intermediate calculations. Round your answer to the nearest cent. $ If this were an annuity due, what would its future value be? Do not round intermediate calculations. Round your answer to the nearest cent. $What is the present value of 500 received at the beginning of each year for 15 years? (Assume the first payment is received today. Use a discount rate of 10℅, and round your answer to the nearest ten.) How do i solve this on a financial calculator?What is the future value of a $980 annuity payment over six years if interest rates are 10 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) FUTURE VALUE?