Mr. Purdy purchased a $100,000, 5-year accumulating deferred annuity with a 5% interest rate maturing in 5 years. The value at maturity.would be $127 628. At the end of 4 years, the value had climbed to $121.550.48 but interest rates had increased to 6%. Mr. Purdy decided.that he wished to close the 5% fund so that he could reinvest in the current 6% fund. What is the market value adjustment that Mr. Purdywould pay at the end of 4 years to break his contract and receive his money?Select one!a $1.148b. 5682$574di so

Market value adjustment refers to the adjustment of the values on the basis of future and the…

Mr. Purdy purchased a $100,000. 5-year accumulating deferred annuity with a 5% interest rate maturing in 5 years. The value at matu would be $127.628. At the end of 4 years, the value had climbed to $121.550.48 but interest rates had increased to 6%. Mr. Purdy del that he wished to close the 5% fund so that he could reinvest in the current 6% fund. What is the market value adjustment that Mr. Pr would pay at the end of 4 years to break his contract and receive his money? Select one: a $1.148 b. 5682 C 5574 di so

Mr. Purdy purchased a $100,000. 5-year accumulating deferred annuity with a 5% interest rate maturing in 5 years. The value at matu would be $127.628. At the end of 4 years, the value had climbed to $121.550.48 but interest rates had increased to 6%. Mr. Purdy del that he wished to close the 5% fund so that he could reinvest in the current 6% fund. What is the market value adjustment that Mr. Pr would pay at the end of 4 years to break his contract and receive his money? Select one: a $1.148 b. 5682 C 5574 di so

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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Similar questions

Solve by using the sinking fund or amortization formula. Betty Price purchased a new home for $245,000 with a 10% down payment and the remainder amortized over a 15 year period at 9% interest. (a) What amount (in $) did Betty finance? $ (b) What equal monthly payments (in $) are required to amortize this loan over 15 years? (Round your answer to the nearest cent.) $ (c) What equal monthly payments (in $) are required if Betty decides to take a 20 year loan rather than a 15 year loan? (Round your answer to the nearest cent.) $
Please show detailed steps and correct
A corporation creates a sinking fund in order to have $790,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each week if the annual interest rate is 5.8% compounded weekly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? Determine the value of the fund after 2, 4, and 6 years. 2 years $ 4 years $ 6 years $ How much interest was earned during the fourth week of the 4th year?
Monica invested the profit of his business in an investment fund that was earning 2.75% compounded monthly. He began withdrawing $3,500 from this fund every 6 months, with the first withdrawal in 4 years. If the money in the fund lasted for the next 5 years, how much money did he initially invest in the fund?
Theodore makes beginning of year deposits of 3000 for 10 years into a fund earning interest at an annual effective interest rate of 5%. At the end of each year, the interest earned is deposited into a second fund earning interest at an annual effective interest rate of 6%. Find the total accumulated value of his assets at the end of 10 years.
Arnold deposited a monthly amount of ₱25,000.00 pesos for a period of 10 years at an interest rate of 8%. Starting the first month of 12th year he started to withdraw an amount of ₱20,000.00 per month until the end of 15th year. At the 16th year, because of health emergency, he opted to withdraw an amount of ₱200,000.00. Calculate the available fund in his account 5 years from the last withdrawal.
Mr. Deneau accumulated $98000 in an RRSP. He converted the RRSP into a RRIF and started to withdraw $5400 at the end of every three months from the fund. If interest is 4.1% compounded annually, for how long can Mr. Deneau make withdrawals? State your answer in years and months (from 0 to 11 months).
A Civil Engineer deposited PHP7,000,000 on a bank that earns ten percent compounded annually. Seven years later he perished. His will states that his recipient is children's home which will be accepting the money in perpetuity a year after he expired. How much is the yearly fund the children's home will be receiving.
Sam wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of j4-3.81% p.a. effective and the first scholarship will be first awarded 2.5 years after the date of the donation. (b) Assume that the fund's earnings rate rate has changed from 4-3.81% p.a. to j4-3.56% p.a. one year before the first scholarship payment. How much does Sam need to add to the fund at that time (one year before the first scholarship payment) to ensure that scholarship amount will be unchanged (rounded to two decimal places)? Question 9Answer a. 78309.64 b. 74276.05 C. 71226.96 d. 75395.75
Shane contributed $2,250 at the end of every 3 months into an RRSP fund earning 2.41% compounded quarterly for 11 years. a. What is the future value of the fund at the end of 11 years? b. What is the amount of interest earned over this period?

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