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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4. Rodel decided to sell their farm and to deposit the fund in a bank. After computing the interest, they learned that they may withdraw P480,000.00 arly for 8 years starting at the end of 6 years when it is time for him to retire. How much is the fund deposited if the interest rate is 5% converted annually?
Mr. Canlapan deposited his money from selling his old vehicle. The fund would allow him to withdraw 45,000 pesos semi-annually for 5 years starting at the end of 1 year. How much is the amount deposited if the interest rate is 2% converted semi-annually? Kindly provide a solution type/written (given and formula used) not in an excel computation. Thanks!
Stacey deposits $ 4500 at the end of each year for 30 years into an investment fund which pays out interests at annual effective interest rate of 3 %. He is only able to reinvest this interest at an annual effective interest rate of 2 %. What is the accumulated value of his investments at the time of the last investment. Explain your work.
Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 3.43% p.a. compounded half-yearly (j2=3.43% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation. (b) Assume that two years after the donation, Mike needs to withdraw $1,000,000 from the fund and use the remaining amount to provide an annual scholarship in perpetuity. The time of the first scholarship will be unchanged (3.5 years after the date of the donation). What is the new annual scholarship amount (rounded to two decimal places)?
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).
Mr. Canlapan deposited his money from selling his old vehicle. The fund would allow him to withdraw 45,000 pesos semi-annually for 5 years starting at the end of 1 year. How much is the amount deposited if the interest rate is 2% converted semi-annually?
Jin decided to sell their farm and to deposit the fund in a bank. After computing the interest, they learned that they may withdraw P480,000.00 arly for 8 years starting at the end of 6 years when it is time for him to retire. How much is the fund deposited if the interest rate is 5% converted annually?
Gil decided to sell their farm and to deposit the fund in a bank. After computing the interest, he found out that he may withdraw P350,000 yearly for 4 years starting at the end of 7 years when it is time for him to retire. How much is the fund deposited if the interest rate is 3% converted annually?Given:Find:Solution:
Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 4.47% p.a. compounded half-yearly (2=4.47% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation. (b) Assume that two years after the donation, Mike needs to withdraw $1,000,000 from the fund and use the remaining amount to provide an annual scholarship in perpetuity. The time of the first scholarship will be unchanged (3.5 years after the date of the donation). What is the new annual scholarship amount (rounded to two decimal places)? a. 101959.37 O b. 206197.54 O c. 203631.53 O d. 207511.86
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
Joe Hernandez has inherited $25,000 and wishes to purchase an annuity that will providehim with a steady income over the next 12 years. He has heard that the local savings andloan association is currently paying 6 percent compound interest on an annual basis. Ifhe were to deposit his funds, what year-end equal-dollar amount (to the nearest dollar)would he be able to withdraw annually such that he would have a zero balance after hislast withdrawal 12 years from now?
AC entered into an investment fund four years ago. The investment fund has an interest rate of 3% compounded quarterly. AC deposited Php 50,000 but she withdrew Php 20,000 two years after. The investment fund agency informed her today that she can still get her originally deposited amount five years from now as long as she will deposit a certain amount into the fund today. Determine the amount that she needs to deposit if the new rate of interest in the next 5 years is 4.5 compounded semiannually

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