QUESTION 10 You are given the following info: • The annual effective interest rate is 4%. • S is the future value (i.e. value at time t = 0) of a four year continuous annuity where the payment rate is described by p(t)=4t³, where t is time in years. Find S. Give your answer as a decimal rounded to two places (i.e. X.XX). Note: If you got (9), then (10) shouldn't be too bad.

QUESTION 10 You are given the following info: • The annual effective interest rate is 4%. • S is the future value (i.e. value at time t = 0) of a four year continuous annuity where the payment rate is described by p(t)=4t³, where t is time in years. Find S. Give your answer as a decimal rounded to two places (i.e. X.XX). Note: If you got (9), then (10) shouldn't be too bad.

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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5. Present value of annuities and annuity payments The present value of an annuity is the sum of the discounted value of all future cash flows. You have the opportunity to invest in several annuities. Which of the following 10-year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate. An annuity that pays $500 at the beginning of every six months An annuity that pays $1,000 at the end of each year An annuity that pays $500 at the end of every six months An annuity that pays $1,000 at the beginning of each year You bought an annuity selling at $2,867.74 today that promises to make equal payments at the beginning of each year for the next twelve years (N). If the annuity's appropriate interest rate (1) remains at 9.50% during this time, then the value of the annual annuity payment (PMT) is $375.00 You just won the lottery. Congratulations! The jackpot is $35,000,000, paid in twelve equal annual payments. The first payment on the…
The interest rate required for a $2,050 investment to double in 5 years can be found from this equation: 4,100=2,050(1+r2)104,100=2,0501+r210 . Find the necessary rate. Your answer should be a decimal, but express it as a percentage to 2 decimal places: The rate is %
If the annual interest rate is 8%, what is the daily interest rate that would be used as the "r" in the time value of money equation? Hint: the equation uses the decimal equivalent of the percent Enter your answer to four decimal places.
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6. If the effective interest rate is i per period and you invest b dollars at time 0, then the value at time n is b(1 + i)”. For example, if at time 0 you invest $100 at an effective interest rate of 6% per year, then the value at time 1 is $100(1+0.06) = $106. dollars. At time 2, the value will be $100 (1 + 0.06)² = $112.36. Similarly, the present value (value at time 0) of $100 received 2 years from now would be $100(1+0.06)-²≈ $88.99. Sometimes it's convenient to define d = 1/(1 + i) so that we would have $100(1+i)n = $100d". If the interest rate per year is i compounded semiannually, then the effective annual interest rate is (¹ + 2)²³ - 1₁ 1. For example, if the interest rate is 6% per year compounded semiannually, the effective annual interest rate is 1 + .06 2 2 - 1 ≈ 6.09%. If the interest rate per year is i compounded quarterly, then the effective annual interest rate is 4 (¹ + 4) * - 1 1. (a) If the interest rate is 6% per year compounded quarterly, what is the effective…
0.1 x (0.8) fort = 1, 2, Problem 5. The spot rate of interest is defined by st 3, 4, 5. Find the present value of a 5-year annuity-due in which the first payment is equal to $1000, and each subsequent payment increases by 6% of the immediately preceding payment.
Question 4 What's the present value of a $830 annuity payment over six years if interest rates are 10 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Futre value
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QUESTION 5 What is the present value of an annuity (to nearest dollar) that will give you 25 payments of $1,000 and the first payment is in one year from today? Assume an interest rate of 10 percent. O 9169 O 8981 O 8421 O 9077 O 8514
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