Part 1 A state establishes a sinking fund of $300 million for bonds that will mature in 20 years. How much money (in dollars) must be deposited at the end of each month into an account that earns an annual interest rate of 2% combounded monthly to retire the $300-million bond debt? (Round your answer to the nearest cent.) Part 2 The winner of a lottery chooses to receive annual payments of $180,000 at the end of each year for 25 years. If the current interest rate is 5.9%, find the present value (in dollars) of the payments (Round your answer to the nearest cent.)

Q: A company sold $250,000 bonds and set up a sinking fund that was earning 8% compounded semi-annually…

A: Sinking fund refers to a fund started by the company which saves or set aside some fund or money…

Q: Maju City issued a RM700,500.00 face vale bond with four years until maturity. It will make…

A: Periodic deposit for sinking fund can be calculated by annuity from future value formula in excel…

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A: A sinking fund increases a company's creditworthiness, it allows a small corporation to offer a…

Q: On March 15, year 1, ABC Corporation adopted a plan to accumulate P1,000,000 by September 1, year 5.…

A: Amount to be accumulated = P1000000 Number of deposits (n) = 4 r = 10% Let the annual deposit = A

Q: January 1, you win $2,500,000 in the state lottery. The $2,500,000 prize will be paid in equal…

A: Present Value = Annual Payment * PVIFA(10 years, 6%)

Q: On January 1, you win $3,440,000 in the state lottery. The $3,440,000 prize will be paid in equal…

A: Present value of winnings = Annual installments  amounts x Present value factor (5%, 8 years)

Q: Using the appropriate interest table, provide the solution to each of the follofour questions by…

A: The future value of an annuity is the total value of a series of equal cash flows received or paid…

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A: INTRODUCTION Formula:   Net present value.           1/(1+r)^n NPV of 1 year. 1/(1+0.05)^1 =0.95238…

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A: Present value: Present value means the discounted value of a future sum of money at a given…

Q: Present Value of an Annuity On January 1, you win $4,600,000 in the state lottery. The $4,600,000…

A: Present value is the current value of a future amount that is to be received or paid out. Future…

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A: The question is based on the concept Annuity

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A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Present Value of an Annuity On January 1, you win $3,680,000 in the state lottery. The $3,680,000…

A: An annuity is a series of periodic payments made/received in exchange for a lump sum payment. It is…

Q: Culver Corporation, having recently issued a $20,062,200, 15-year bond issue, is committed to make…

A: Annual payment (C) = $620,000 Rate of return (r) = 0.10 Period (n) = 15 Years Future value of…

Q: Present Value of an Annuity On January 1, you win $1,600,000 in the state lottery. The $1,600,000…

A: Present Value of an Annuity The amount of money you'd have to invest right now to equal the sum of…

Q: Sanders Company is planning to finance an expansion of its operations by borrowing $48,600. City…

A: a. Amount of Interest Sanders will pay in year 1 Under option 1 and 2 Under option 1   Principal…

Q: A $3.6 million state lottery pays $15,000 at the beginning of each month for 20 years. How much…

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Q: Equal deposits are made into a sinking fund at the end of each year for seven years. Interest is…

A: A sinking fund is a fund set up to pay off future debt. A fixed amount is put in at regular…

Q: o raise funds for improvements by issuing 51⁄2 % bonds. There is P 20,000 available per year for…

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Q: A company sold $200,000 bonds and set up a sinking fund that was earning 8.5% compounded…

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A: The quarterly deposit in sinking fund forms the annuity. We can compute the future value of annuity…

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A: The concept of time value of money will be used here. As per the concept of time value of money any…

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A: Sinking Fund refers to amount which is set aside from profits to meet future known liability. It…

Q: On January 1, you win $1,440,000 in the state lottery. The $1,440,000 prize will be paid in equal…

A: PRESENT VALUEPresent Value is the Current Value of Future…

Q: Present Value of an Annuity On January 1, you win $2,200,000 in the state lottery. The $2,200,000…

A: Present value of annuity can be computed by multiplying the present value of annuity of $1 at given…

Q: A lottery offers a $1,000,000 prize to be paid in 20 equal installments of $50,000 at the end of…

A: Annuity is a series of constant payments, yielding certain rate of interest. Future value is the…

Q: Visano

A: Annuity refers to the series of payments made at an equal set of intervals.Annuity due refers to the…

Q: On March 15, year 1, ABC Corporation adopted a plan to accumulate P1,000,00 by September 1, year 5.…

A: When an equal amount is paid every period at the beginning of each period, it is called as an…

Q: On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal…

A: Present value of winnings = Annual installment * PVA of 1 at i for n periods

Q: A city has issued bonds to finance a new convention center. The bonds have a total face value of…

A: Consider the following formula for sinking fund, R = Ai/ (1+i)n-1 Here R is the amount of each…

Q: determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to…

A: The present value of annuity is given by the following formula : Present value of annuity = Annual…

Q: A company plans to make four annual deposits of $4,250 each to a special building fund. The fund's…

A: Accumulated value refers to an amount that is the addition of periodic deposits and interest rate…

Q: Find the interest rate needed for the sinking fund to reach the required amount. Assume that the…

A: Borrowings are the liability that is used to finance the requirement of the funds. The borrower…

Q: Present Value of an Annuity On January 1, you win $60,000,000 in the state lottery. The $60,000,000…

A: Present value is the value of the future sum of money or cash flows today as per given rate of…

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A: We can determine the payment amount with either a formula or with a financial…

Q: Ques 11 and 12

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Q: A pension plan must make total disbursements of $2.7 million, $3.7 million, and $2.7 million…

A: The time value of money technique explains the concept that the rupee received today is worth more…

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A: The balance in the fund January 1, 2030 would be future value of an annual deposit at 8% discount…

Q: Present Value of an Annuity On January 1, you win $2,900,000 in the state lottery. The $2,900,000…

A: Present value of annuity can be calculated as: = Annuity payment * Present Value annuity factor (i%,…

Q: Coronado Corporation, having recently issued a $ 20,153,400, 15-year bond issue, is committed to…

A: The question is based on the concept of Financial Management.

Q: Northern Flying Science is preparing to buy an aircraft estimated to cost $600,000 by making equal…

A: a)  Size of the quarterly payment N = 5*4 =20 I/Y = 8/4 = 2 PV =0 FV = -600,000 Compute PMT

Q: On January 1, you win $1,900,000 in the state lottery. The $1,900,000 prize will be paid in equal…

A: Present value of winnings = Annual amount to be received x Present value of $1 Annuity (7%, 10…

Characteristics of Bonds