Use the factors below to answer this question. A rate of 12%, compounded annually, applies to this question. (Table 1) Future Value Single for 3 period at 12%: 1.405 (Table 2) Future Value Annuity for 3 period at 12%: 3.374 (Table 3) Present Value Single for 3 period at 12%: 0.712 (Table 4) Present Value Annuity for 3 period at 12%: 2.402 What amount must be deposited in the bank today to be able to withdraw $400 at the end of each year for the next three years? O a. $960.80 O b. $562.00 OC. $284.80 O d. $1,349.60

Use the factors below to answer this question. A rate of 12%, compounded annually, applies to this question. (Table 1) Future Value Single for 3 period at 12%: 1.405 (Table 2) Future Value Annuity for 3 period at 12%: 3.374 (Table 3) Present Value Single for 3 period at 12%: 0.712 (Table 4) Present Value Annuity for 3 period at 12%: 2.402 What amount must be deposited in the bank today to be able to withdraw $400 at the end of each year for the next three years? O a. $960.80 O b. $562.00 OC. $284.80 O d. $1,349.60

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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Solve by using formulas. (Round your answer to the nearest cent.) Ordinary Annuity AnnuityPayment PaymentFrequency TimePeriod (years) NominalRate (%) InterestCompounded Future Valueof the Annuity (in $) $5,000 every 6 months 9 9.0 semiannually $
9. Examine the time line for Now the annuity shown. 250 (1.015) 250 (1.015) 250 (1.015) E 250 (1.015)23 250 (1.015) a) What is the duration of this annuity? How can you tell? b) Determine the annual rate of interest and the number of compounding periods per year. c) Determine the present value of this annuity. d) Determine the total interest earned. ANSWER 9. a) 6 years b) 6%; 4 compounding periods per year c) $5007.60 d) $992.40 Time (3-month periods) 1 2 250 250 250 250 250 3 23 24 H-H
Find the future values of the ordinary annuities at the given annual rate r compounded as indicated. The payments are made to coincide with the periods of compounding. (Round your answer to the nearest cent.) PMT = $200, r = 2.7%, compounded semiannually for 25 years
calculate the present value (in $) of the ordinary annuity. (Round your answer to the nearest cent.) AnnuityPayment PaymentFrequency TimePeriod (years) NominalRate (%) InterestCompounded Present Valueof the Annuity $3,000 every year 20 5 annually $
Estimating the annual interest rate with an ordinary annuity. Fill in the missing annual interest rates in the following table for an ordinary annuity stream. Number of Payments or Years Annual Interest Rate Future Value Annuity Present Value 10 ? $0.00 $600.00 $2,386.09 18 ? $13,278.73 $354.57 $0.00 40 ? $0.00 $1,872.79 $40,000.00 60 ? $266,564.09 $500.00 $0.00 Number of Payments or Years Annual Interest Rate Future Value Annuity Present Value 10 nothing% (Round to two decimal places.) $0.00 $600.00 $2,386.09 18 nothing% (Round to two decimal places.) $13,278.73 $354.57 $0.00 40 nothing% (Round to two decimal places.) $0.00 $1,872.79 $40,000.00…
Find the payment made by the ordinary annuity with the given present value. $242,665; quarterly payments for 15 years; interest rate is 7%, compounded quarterly The payment is $ **] (Simplify your answer. Round to the nearest cent as needed.)
Use tabular presentation to support your answer
Find the future value of an annuity due for payments of $450 for 12 years with a rate of 0.24% compounded annually. Use the formula: FV = PMT1+)". (1+01 - PMT %3D Express your answer with the proper unit rounded to the nearest cent.
Estimating the annual interest rate with an ordinary annuity. Fill in the missing annual interest rates in the following table for an ordinary annuity stream: Number of Payments or Years 10 19 25 80 Annual Interest Rate % (Round to two decimal places.) % (Round to two decimal places.) % (Round to two decimal places.) % (Round to two decimal places.) Future Value $0.00 $12,286.30 $0.00 $1,435,078.21 C Annuity Present Value $580.00 $444.01 $1,985.57 $450.00 $2,298.49 $0.00 $37,000.00 $0.00
Find the value of the annuity at the end of the indicated number of years. Assume that the interest is compounded with the same frequency as the deposit. M= $200 N=annually R=9% T=20 Answer choices: A.) 10,232.02 B.) 133,577.37 C.)11,258.31 D.)11,610.43 E.)9,664.34
"The payments are made monthly and its compounding periods is quarterly." What kind of annuity is this? a. simple annuity b. general annuity
An increasing annuity makes annual payments, and the first payment occurs in 6 months. The annuity pays 36 in 6 months, 39 in 1.5 years, 42 in 2.5 years, and so on until a final payment of 78 in 14.5 years. Using an annual effective interest rate of 14%, calculate the present value of the annuity. O A) 281 B) 288 C) 297 OD) 308 E) 329

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