(Related to Checkpoint 6.1) (Annuity payments) Lisa Simpson wants to have $1,200,000 in 40 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 10.75 percent annually. What must Lisa's annual deposit be? The amount of Lisa's annual deposit must be S (Round to the nearest cent.) (Present value of an annuity) Determine the present value of an ordinary annuity of $3,000 per year for 14 years, assuming it earns 7 percent. Assume that the first cash flow from the annuity comes at the end of year 7 and the final payment at the end of year 20. That is, no payments are made on the annuity at the end of years 1 through 6. Instead, annual payments are made at the end of years 7 through 20.
(Related to Checkpoint 6.1) (Annuity payments) Lisa Simpson wants to have $1,200,000 in 40 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 10.75 percent annually. What must Lisa's annual deposit be? The amount of Lisa's annual deposit must be S (Round to the nearest cent.) (Present value of an annuity) Determine the present value of an ordinary annuity of $3,000 per year for 14 years, assuming it earns 7 percent. Assume that the first cash flow from the annuity comes at the end of year 7 and the final payment at the end of year 20. That is, no payments are made on the annuity at the end of years 1 through 6. Instead, annual payments are made at the end of years 7 through 20.
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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Ques 17 and 18
Transcribed Image Text:(Related to Checkpoint 6.1) (Annuity payments) Lisa Simpson wants to have $1,200,000 in 40 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 10.75 percent annually. What must Lisa's annual deposit be?
The amount of Lisa's annual deposit must be S
(Round to the nearest cent.)
Transcribed Image Text:(Present value of an annuity) Determine the present value of an ordinary annuity of $3,000 per year for 14 years, assuming it earns 7 percent. Assume that the first cash flow from the annuity comes at the end of year 7 and the final payment at the end of year 20. That is, no payments are made
on the annuity at the end of years 1 through 6. Instead, annual payments are made at the end of years 7 through 20.
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