Suppose you bought a 25-year annuity of $7,900 per year at the current discount rate of 12 percent per year. a. What is the value of your annuity today? (Do not round intermediate calculations and round your answer to 2 decimal places b. What is the present value if interest rates suddenly drop to 7 percent? c. What is the present value if interest rate suddenly rise to 17 percent?

Q: What is the value today of $4,300 per year, at a discount rate of 10 percent, if the first payment…

A: First payment is received 6 years from today and last 20 years from today. Therefore, total payments…

Q: The present value of an annuity is the sum of the discounted value of all future cash flows. You…

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Q: What is the future value of a $900 annuity payment over five years if interest rates are 8 percent?…

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Q: What’s the interest rate of a 7-year, annual $3,900 annuity with a present value of $20,000? (Use a…

A: Calculate the interest rate as follows:MS-Excel --> Formulas --> Financials --> Rate

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Q: A. What is the present value of a $500 perpetuity if the interest rate is 9%? Round your answer to…

A: Perpetuity = $500 A. Interest rate = 9% B. Interest rate =18%

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Q: a. If the interest rate is 5.0% per year, approximately how long will it take for your money to…

A: The Rule of 72:The Rule of 72 is a simple, effective rule that is frequently used to determine how…

Q: ears if the annual interest rate is 8 percent. a. What would be the future value if the interest…

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Q: Suppose that an annuity will provide for 20 annual payments of 1240 dollars, with the first payment…

A: Total number of payments "N" is 20 Annual payments "PMT" is $1,240 Interest rate is 8.8% convertible…

Q: b) Suppose you begin saving for your retirement by depositing $2,000 per year in an IRA. If the…

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Q: What is the present value of $3,000 paid each year forever, assuming a discount rate of 5% and the…

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Q: a-1. With a 3.0% inflation rate (Spreadsheet 21.2), by how much would your retirement annuity grow…

A: Real interest rate is interest rate you achieve after consideration of inflation and if inflation is…

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A: The concept of the time value of money states that the same amount of money today is worth more than…

Q: What's the future value of a 3%, 5-year ordinary annuity that pays $300 each year? If this was an…

A: Interest Rate = r = 3%Time = t = 5 YearsAnnuity = a = $300

Q: What's the present value, when interest rates are 8.0 percent, of a $70 payment made every year…

A: Interest % = 8% Annual Payment = 70 Present Value of Payments made in perpetuity = Annual Payment /…

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Q: What's the interest rate of a 5-year, annual $4,200 annuity with present value of $16,000? (Use a…

A: Solution:-When an equal amount is paid each period, it is known as annuity.We know, present value of…

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A: Present value refers to a concept of time, value, and money that is issued for estimating the…

Q: Suppose you are going to receive $17,500 per year for five years. The appropriate interest rate is…

A:

Q: What is the relationship between the value of an annuity and the level of the interest rate? Suppose…

A: The question gives the following information:

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Q: perpetuity

A: Formula for present value of perpetuity: Present value of perpetuity = PMT/i Where PMT is the annual…

Q: Future value of an annuity: How much money would an investor have if they invested the $5,500 per…

A: Future value is an estimate of future cash flows ​​that may be received at a future date, discounted…

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A: The majority of loan and borrowing transactions therefore involve interest rates. People take out…

Q: ancial planner offers you two different investment plans. Plan X is an annual perpetuity of $12,000…

A: Perpetuity is annuity where there are payments forever and payment continue forever and other…

Q: What is the future value of a 12%, 5-year ordinary annuity that pays $600 each year? Do not round…

A: Ordinary annuity is when the payments start at time 1, Annuity due is when the payments start at…

Q: the future value of an ordinary annuity

A: 1. FV of Ordinary Annuity​=C×(1+i)n−1​/i where: C=Cashflow per period i= interest rate n= number…

Q: What is the future value of an 8%, 5-year ordinary annuity that pays $350 each year? Do not round…

A: Interest rate (r) = 8% Annual payment (P) = $ 350 Number of annual payments (n) = 5

Q: An annuity pays $1000 per year for 12 years. Inflation is 6 percent per year. The annuity costs…

A: Internal rate of return is one of the modern techniques of capital budgeting which considers the…

Q: Not too long ago, interest rates were essentially zero. If interest rates fall to 1/100th of a basis…

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Q: Example 2.14: Calculating the present value of an annuity due at 12% An investor wants to buy an…

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Q: You buy an ordinary annuity today for $120,583, which promises to pay you $11,256 per year. If the…

A: An annuity refers to a series of cash flows that occurs on a periodic basis. The cash flow series…

Q: How much would be in your savings account in 9 years after depositing $190 today if the bank pays 9…

A: Deposit amount (P) = $190 Interest rate (r) = 9% Period (n) = 9 Years

Q: Suppose you just bought an annuity with 10 annual payments of $16,500 at a discount rate of 13.75…

A: The objective of the question is to calculate the present value of an annuity under different…

Q: Suppose you just bought an annuity with 12 annual payments of $15,700 at a discount rate of 11.75…

A: Annuity payment = $15,700Number of annuities  = 12Discount rate = 11.75%

Q: Present value of annuities and annuity payments me present value of an annuity is the sum of the…

A: First let us define annuity. An annuity is a contract that provides a series of payments made at…

Q: The present value of an annuity is the sum of the discounted value of all future cash flows. You…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: What's the interest rate of a 8-year, annual $3,600 annuity with present value of $20,000? (Use a…

A: Annuity amount=$3600Period of annuity=8yearsToday amount=$20000