The annually compounded discount rate is 9.0%. You are asked to calculate the present value of a 18-year annuity with payments of$50,900 per year.a. Calculate the PV if the annuity payments arrive at one-year intervals. The first payment arrives one year from now. (Do not roundintermediate calculations. Round your answer to 2 decimal places.)Present valueb. Calculate the PV if the first payment arrives in six months. Following payments arrive at one-year intervals (i.e., at 18 months, 30months, etc.). (Do not round intermediate calculations. Round your answer to 2 decimal places.)Present value

Given information : The present value refers to the calculation under which all the potential cash…

Answered: The annually compounded discount rate…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

See similar textbooks

Similar questions

The annually compounded discount rate is 7.0%. You are asked to calculate the present value of a 14-year annuity with payments of $50,500 per year. a. Calculate the PV if the annuity payments arrive at one-year intervals. The first payment arrives one year from now. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. Calculate the PV if the first payment arrives in six months. Following payments arrive at one-year intervals (i.e., at 18 months, 30 months, etc.). Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Present value b. Present value
What is the present value of a 3-year annuity of $180 if the discount rate is 7%? . What is the present value of the annuity in (a) if you have to wait an additional year for the first payment? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
What is the present value of a 3-year annuity of $120 if the discount rate is 7%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) What is the present value of the annuity in (a) if you have to wait an additional year for the first payment? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Find the NPV and PI of an annuity that pays $500 per year for eight years and costs $2,500. Assume a discount rate of 6%. Show the calculations.
This problem demonstrates the dependence of an annuity's future value on the size of the periodic payment. Suppose a fixed amount will be invested at the end of each year and that the invested funds will earn 5.3% compounded annually. What will be the future value of the investments after 15 years if the periodic investment is: (Do not round intermediate calculations and round your final answers to 2 decimal places.) Investment Future Value a. $2,300 per year $ b. S3, 300 per year $ c. S4, 300 per year $
Use a calculator to evaluate an ordinary annuity formula. For m, r, and t (respectively). Assume monthly payments. (Round your answer to the nearest cent). $100; 4%; 12 years.
a. What is the present value of a 3-year annuity of $280 if the discount rate is 6%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the present value of the annuity in (a) if you have to wait an additional year for the first payment? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Suppose the interest rate is 7.7% APR with monthly compounding. What is the present value of an annuity that pays $100 every three months for five years? (Note: Be careful not to round any intermediate steps less than six decimal places.) The present value of the annuity is $_______ (Round to the nearest cent.)
What is the present value of a 6-year annuity of $2,250 per period in which payments come at the beginning of each period? The interest rate is 10 percent. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. When using Appendix D to find the present value of this annuity due, subtract 1 from n and add 1 to the table value. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Present value
Use graphical approximation techniques or an equation solver to approximate the desired interest rate. A person makes annual payments of $1000 into an ordinary annuity. At the end of 5 years, the amount in the annuity is $5815.35. What annual nominal compounding rate has this annuity earned? Please step by step answer.
Compute the present value of an annuity of $621 per year for 25 years, given a discount rate of 6 percent per annum. Assume that the first cash flow will occur one year from today (that is, at t = 1). Round your answer to 2 decimal places; record your answer without commas and without a dollar sign. Your Answer: Answer
What is the present value of a 10-year annuity of $5,250 per period in which payments come at the beginning of each period? The interest rate is 11 percent. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. When using Appendix D to find the present value of this annuity due, subtract 1 from n and add 1 to the table

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS