Problem 11-10 (Algo)Required:A pension plan is obligated to make disbursements of $1.2 million, $2.2 million, and $1.2 million at the end of each of the next threeyears, respectively. Find the duration of the plan's obligations if the interest rate is 10% annually. (Do not round intermediatecalculations. Round your answer to 4 decimal places.)Durationyears

In fixed income investments, duration serves as a crucial metric for assessing a bond's price…

Answered: Problem 11-10 (Algo) Required: A…

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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A pension plan must make total disbursements of $4.7 million, $6.7 million, $5.7, $3.0 and $1.0 million annually for the next five years, respectively. The fund makes these payments twice a year, paying half of each year's total amount six months into the year and the remaining half at the end of the year.Find the duration of the pension obligations if spot rates are flat at 8%. Group of answer choices 1.91 3.86 4.76 2.00 2.17
Show Solution. Topic: General Annuity 3. Find the periodic payment of an annuity payable semiannually for 12 years, whose present value is P87,200 with interest rate at 14% compounded quarterly?
For the sinking fund, use Table 12-1 to calculate the amount (in $) of the periodic payments needed to amount to the financial objective (future value of the annuity). (Round your answer to the nearest cent.) Sinking Fund Payment $ 27658 x Payment Frequency every year Time Period (years) 14 Interest Nominal Rate (%) Compounded annually 8 Future Value (Objective) $750,000
Under a new company employees savings plan, an employee will pay P 250 at the beginning of each month for 5 years, and the management guarantees accumulation of the savings at 5% compounded annually. How much will be the amount of the savings plan of each employee after 5 years? Select one: O a. P 17,020 O b. P 15,826 O c. P 14,882 O d. P 17,456
UNIT 7-18
6. Choose the best retirement plan for the employee from among those presented below. interest is 12.00% pa compounded monthly. Select the correct response: P200,000 now plus P1.7 M after 2 years P100,000/month for 1 year plus P400,000 after one year P64,000/month for 2 years O P1.65M on the 18th month
blem #1: $10,000 is used to purchase an appropriate size annuity that has level annual payments for 18 years. The price of the annuity is based on an effective annual rate of 11.2%. As each payment is received, it is put into a fund that earns an effective annual rate of 7%. (a) Determine the accumulated value of the investment at the end of 18 years. (b) If the $10,000 were put into a fund that was to produce the same final value after 18 years, what annual effective rate would that fund have to offer?
Please no excel. Thanks An 18-year loan of 21,000 may be repaid under the following two methods: amortization method with equal annual payments at an annual effective rate of 6.1% sinking fund method in which the lender receives an annual effective rate of 6.450% and the sinking fund earns an annual effective rate of j. Both methods require payment of X to be made at the end of each year for 18 years. Calculate j. Round your answer to one decimal place
Your employer contributes $500 per month, at the beginning of each month, to a retirement fund on your behalf. The contributions earn interest at a rate of 6% per year, compounded monthly. At the end of twenty years, what will be the balance of the fund? Group of answer choices $69,790 $232,175 $70,139 $220,713 $231,020
You expect to receive the following: $4,448 $22,900 $3,813 at the end of each year for 12 years today at the end of year 6 at the end of each year forever $843 $10,528 at the end of 15 years What is the uniform annual payment for the first 12 years equivalent to the above payment scheme, if the interest rate is 8%? Enter your answer as follow: 123456
The proceeds of $493000 death benefit are left on deposit with an insurance company for 10 years at an annual effective interest rate of 18.04 %. The balance at the end of 10 years is paid to the beneficiary in 125 equal monthly payments of X, with the first payment made at the end of 10 month from the end of deposit. During the payout period, interest is credited at an annual effective interest rate of 12.89 %. Calculate X. Answer: 41544.44
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