Nancy Jackson just learned that she received an inheritance from her grandmother. The inheritance provides for Nancy to receive $5100 per year at the end of the year for each of the next 6 years. Assuming a discount rate of 11%, what is the value of this inheritance to Nancy today? Type of Cash Flow PV of $1 FV of $1 PV ordinary annuity FV ordinary annuity PV annuity due O $21576 O $40356 O $18849 O $23949 Periods 6 6 6 6 6 Interest Rate 11% 11% 11% 11% 11% Factor 0.5346 1.8704 4.2305 7.9129 4.6959

Nancy Jackson just learned that she received an inheritance from her grandmother. The inheritance provides for Nancy to receive $5100 per year at the end of the year for each of the next 6 years. Assuming a discount rate of 11%, what is the value of this inheritance to Nancy today? Type of Cash Flow PV of $1 FV of $1 PV ordinary annuity FV ordinary annuity PV annuity due O $21576 O $40356 O $18849 O $23949 Periods 6 6 6 6 6 Interest Rate 11% 11% 11% 11% 11% Factor 0.5346 1.8704 4.2305 7.9129 4.6959

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

6. Anne, now aged 30, pays RM500 today into a retirement fund and will pay RM500 annually up to and including her 55h birthday. Beginning on her 60th birthday, Anne will receive an annual pension ofR for life. Find R.
James plans to receive a monthly annuity of $779 for the next 25 years as part of his inheritance. The interest rate is 10.78 per annum compounded monthly Calculate the present value (PV) of this annuity. $72.26 O$779.00 $867.16 $289.05 O $1.11
jitu
6. By the conditions of a will, the sum of P25,000 is left to a girl to be held in trust by her guardian until it amounts to P45,000. When will the girl receive the money if the fund is invested at 8% compounded quarterly? Ans, 7.42 years 7. At a certain interest rate compounded semiannually, P5,000 will amount to P20.000 after 10 years. What is the amount at the end of 15 years? Ans. P40.029.72
Which of the following choices is considered as an annuity? Explain. a. Niall gets $10 this year and $20 next b. Rexha gets $10 in 3 months and $10 6 months later c. Taylor gets $50 in 6 months and $20 6 months later d. Nina gets $100 every year for the rest of her life
6. When Alice and Mark's first child was one month old, and at the end of every month thereafter, they invested S80 in a Registered Education Savings Plan (RESP) that paid 6% per year, compounded monthly. Determine the amount in the RESP on the child's 18th birthday. a. $23 114.70 b. $19 177.92 c. $30 988.26 d. $27 051.48
Susan won the lottery today which will pay an annual perpetuity of X, with the first payment occurring five years from today. The perpetuity has a present value of 100,000 based on an annual effective interest rate of 1% for the first ten years and 5% for all years thereafter. Calculate X. A. 4,100 B. 4,224 C. 4,357 D. 4,401 E. 5,696
Deline inherits Goo coo. She decides to have it pond to her in two payments: one payment four years from now and the Second Payment twice the size of the payment light years from now, if money is worth 12,6% Compounded Quarterly, then the amount of money that Delive expects to receive eight years from now is? A. R888 783,67 B 888 317,96 C 444 391,83 D. 442 658198
Trust Fund Grandparents decide to put a lump sumof money into a trust fund on their granddaughter’s10th birthday so that she will have $1,000,000 on her60th birthday. If the fund pays 11%, compoundedmonthly, how much money must they put in theaccount?
Ee 86.
The Amount of an Endowment Heidi has an investment that generates an income of $35,000/year in perpetuity. Assuming that her income flows continually and her investment earns interest at the rate of 8%/year compounded continuously, what is the present value of her investment?