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You invest 50,000 at time 0 in order to receive payments of X at times 15,16,17 and so on with the last payment at time 25 (all in years). Using an annual effective interest rate of 7%, find X
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- Suppose that you will receive annual payments of $16,500 for a period of 10 years. The first payment will be made 6 years from now. If the interest rate is 7%, what is the present value of this stream of payments?You will receive a cash payment of $6.4 in 4 years. If the relevant interest rate is 16.4%, how much is it worth today? Answer:You have RM 5,000.00 you want to invest for the next 45 years until retirement. You are offered an investment plan that will pay you 6 percent per year for the next 15 years and 10 percent per year for the last 30 years.a) Explain the time value of money principleb) Identify the underlying assumption of the time value of money principlec) Draw a graph that illustrates the relationship between interest rates and the present value of RM 1,000.00 to be received in one year.d) Suggest how you can minimize the amount of cash you must invest in order to reach your retirement goal.e) Compute the amount you will have at the end of the 45 years.f) Calculate the amount you would have if the investment plan pays 10 percent for the first 15 years and 6 percent per year for the next 30 years.
- Suppose you are going to receive $5,000 per year for 8 years. The appropriate interest rate is 10 percent. What is the present value of the payments if they are in the form of an ordinary, a. anhuity? b. What is the present value if the payments are an annuity due?Consider an investment which pays $3,000 at the end of year 1, year 2, and year 3. In year4, the investment will pay $4,000 and this payment will grow by 2% each year forever. If theappropriate interest rate is 9%, what is this investment worth today? (Show Using BA II Plus or By Hand)Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) PV = $ $300 per month for 10 years, if the account earns 2% per year and if there is to be $10,000 left in the annuity at the end of the 10 years X Need Help? Read It Watch It
- In order to fund your retirement, deposit of RM X can be made into an account today. This retirement plan wishes to pay RM100, in real terms, for 15 years, with first payment occurring 6 years from now. The inflation rate would be 0.0% for the next 5 years and 1.5% per annum thereafter. The annual effective rate of return is 6.8%. Calculate X. Please explain in details and state what formula did use on how to solve the problemYou make an investment into a money market account at time T=0. In year T=5, the value of the money market account will be $5,000. The money market account pays an annual interest of R=6%, and interest is compounded on a quarterly basis. What is the present value of this account?Assume you borrow $2000 now at 7% per year for 10 years and must repay the loan in equal yearly payments. Determine the symbols involved and their values.
- Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $900 per month for 20 years, if the account earns 2% per year PV = $ Need Help? Read It Watch ItYou may purchase an annuity that will pay you 300000 in income per year starting one year from now and continuing for a total 22 years, or 22 payments. Assuming an annual risk-free interest rate of 4%, what is a fair price for this annuity?You purchase a 10-year annuity that pays you \$ 30000 / v * ear . The first payment will begin in three years. What is the duration of this annuity if the rate of interest is 8%? Show your calculations