Qustion What the value ofa vestment that promises to pay $502 annually in perpetuity if the appropriate required rate of return is 8.4 percent? 532 $59 76 $46310 $544 17 None of the listed choices is correct

Q: Question 8 What is the future value of a lump sum of $4,351 invested for 7 years at 5.4 percent…

A: Initial investment (I) = $4,351 Interest rate (r) = 0.054 Period (n) = 7 Years Future value = ?…

Q: (Present value of a complex stream) Don Draper has signed a contract that will pay him $60,000 at…

A: Annual payments = $60,000Additional payment = $140,000Discount rate = 7%Number of years = 7To find:…

Q: Annuity X pays $115 at each year-end for 3 years. Annuity Y pays $105 at the beginning of each year…

A: Variables in the question:Annuity X pays $115 at each year-end for 3 yearsAnnuity Y pays $105 at…

Q: What is the present value of $100 today, $200 at the end of Year 1, and $300 at the end of Year 2 if…

A: Present value (PV) is the current value of a future sum of money or stream of cash flows given a…

Q: 1 Although both immediate and variable annuities can provide lifetime income to annuitants, they…

A: Immediate annuity- Under this, an annuitant  or annuity owner pay  a lump sum amount  to purchase an…

Q: If you put up 23,000 today in exchange for a 6 percent, 10-year annuity, what will the annual cash…

A: Invested Amount = $ 23000Interest Rate = 6% Compounded AnnuallyPeriod = 10 YearsAnnual Cash Flow = ?

Q: A perpetuity paying 1 at the beginning of each 6-month period has a present value of 95. A second…

A: Given, The PV of perpetuity 6 month period is 95 Another perpetuity pays X.

Q: A perpetuity-due pays 1 per year, and its present value is 26. An increasing perpetuity-due pays X…

A: When the periodic payment are for infinite time period, the cash flows is called a perpetual cash…

Q: Appendix EX 14-19 Present value of an annuity On January 1, you win $60,000,000 in the state…

A: Present Value is the current price of future value which will be received in near future at some…

Q: What amount of money deposited 70 years ago at 3% interest would provide a perpetual (i.e. infinite…

A: Perpetual Amount Formula = Annual Amount/ Interest rate  Annual Amount = $ 23,000 Interest Rate = 3%…

Q: You want to buy a car, and a local bank will lend you $30,000. The loan will be fully amortized over…

A: Calculation of Monthly loan payment :To calculate the monthly loan payment, we can use the formula…

Q: ques 6

A: PV=Pr1−(1+r)−n​P annual payment = $4500r discount rate per period = 0.16n number of periods = 14yrs

Q: Carrie Tune will receive $32,000 for the next 14 years as a payment for a new song she has written.…

A: The present value of the annuity is the discounted worth that is defined as the process of…

Q: Present value of an ordinary annuity. Fill in the missing present values in the following table for…

A: Present Value: It represents the current or present value of the future expected sum of the amount.…

Q: What is the present value of an annuity of $456 to be received at the end of each year for three…

A: The current worth of the annuity that will be received for a fixed tenure at a given interest rate…

Q: Present Value of a Perpetuity What's the present value, when interest rates are 6.70 percent, of a…

A: The quantity of the regular cash flows is simply divided by the discount rate to get the present…

Q: If you invest $9,100 per period for the following number of periods, how much would you have in each…

A: TVM concept will be used here.   TVM means time value of money.

Q: What is most that we should pay today for an annuity contract that promises to pay $15,000 per year…

A: We need to use ordinary annuity(payment due at end) formula below to calculate present sum needed…

Q: else constant, which one of the following will result in the lowest present value of a lump sum?…

A: The present value concept is a fundamental principle in finance, reflecting the notion that money…

Q: Problem 10 Determine the present value of each perpetuity shown in the following table. Annual…

A: Perpetuity Annual amount Discount rate A 30000 8% B 100000 12% C 20000 6% D 60000 5%

Q: 4.8

A: = FV/ (1+r)^n Here given FV =10000 r=7%, and n=15 years, So PV = 10000/ (1+7%)^15

Q: What is the future value of a 10%, 5-year ordinary annuity that pays $200 each year? Do not round…

A: The amount that a present investment will gain in value over time when kept in a compound interest…

Q: 3.You are given the option of receiving a lump sum of $20,000 now or an annuity of $2000 per year…

A: An annuity is a financial instrument that provides a series of equal payments made at equal…

Q: Step 7 Part (3): Calculation of new annual deposable amount: Answer: New annual deposable amount is…

A: We will give you the steps for how the amount 5823.77 is calculated . we have;

Q: What is the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If this were an…

A: Here,InterestRate is 7%Time Period is 5 yearsAnnuity is $300

Q: Use the table below to answer the following questions:                  Present Value of 1 Factor…

A: Discounting is a technique through which present value of amount receive or pay in future is…

Q: PNG se th ar ye the What is the present value of an annuity of $4,000 received at the beginning of…

A: Payment = p = $4000Time = t = 8Discount Rate = r = 9%Payment Type = at the beginning

Q: What is the present value of a $1,450 payment made in seven years when the discount rate is 10…

A: Future value (FV) = $1,450 Discount rate (r) = 0.10 Period (n) = 7 years Present value = ?

Q: Q19 Compute the present value of an $1,450 payment made in 10 years when the discount rate is 12…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The payment initially made…

Q: (Click on the icon to view Present Value of $1 table.) (Click on the icon to view Present Value of…

A: initial investment =600000 Annual cash flow =129500 Period =10 years  Required rate=16%

Q: What is the future value of $200 received today and deposited at 8 percent compounded semi-annually…

A: Interest Rate = 8%Semi-annually rate = =0.04No. of years = 8Total no. of years =  3 x 2= 6Present…

Q: Sheridan Inc. owns and operates a number of hardware stores in the Atlantic region. Recently, the…

A: Since only the present value of the lease alternative is requested, therefore Cost of Leasing =…

Q: Problem 5 Given the following spot rates and forward rates (in percents) for the effective years:…

A: Spot rate - Spot rate is also known as the spot price is the price quoted for immediate settlement…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.