Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2016, of a five-period annual annuity of $5,000 under each of the following situations: 1. The first payment is received on December 31, 2017, and interest is compounded annually. 2. The first payment is received on December 31, 2016, and interest is compounded annually. 3. The first payment is received on December 31, 2017, and interest is compounded quarterly.

Q: If the single payment present worth factor for 10 years is 0.30656. Determine the interest rate…

A: The present factor is the present value of $1 that has to be received/paid in the future.

Q: If $417.00 is deposited at the end of each year for 6 years into an ordinary annuity earning 4.08%…

A: Here, Yearly Deposit is $417.00 Time Period is 6 years Interest Rate is 4.08% Compounding Period is…

Q: The FV of an annuity where payments are made at the beginning of the year is $6,456 and the FV of an…

A: Let annual Payment = P Interest Rate =r Time Period(n)  = 5

Q: Finding the compound sum of $1,000 to be received at the beginning of each of the next 5 years…

A: The term annuity depicts a stream of equivalent periodic cash flows over a specific time duration.…

Q: The present value of an annuity using an effective annual discount rate of 12% is $40,043.69. This…

A: An annuity is a payment series where a periodic sum is paid in exchange for a lump sum payment. It…

Q: Use the ordinary annuity formula to determine the accumulated amount in the annuity.   ​$500…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: An annuity makes semi-annual payments for 10 years. The first year the payments are 100 and each…

A: Solution- Step (1) Given that Amount of first payment =100 Numbers of year =10 Number of semi-annual…

Q: Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of…

A: 1. Present value of annuity when payments are made at the end of year.PV = A * where,PV = Present…

Q: Calculate the future value of an ordinary annuity of which periodic deposit is P7,000.00 at 8%…

A: Future value can be calculated using FV (rate, nper, pmt, [Pv], [type]) Rate The interest rate Nper…

Q: An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate…

A: Solution 1: Present value of annuity = P25,000 * Cumulative PV factor at 4% for 18 periods of…

Q: Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of…

A: Annuity refers to a stream of constant and usually fixed cash flows. Here the annual amount of $6200…

Q: Calculate the future value of an ordinary annuity where $125 is deposited and compounded monthly at…

A: The future value of an ordinary annuity is given by the formula where Py is the annuity payment, i…

Q: The future value of regular annuity of $2,000 per year for 20 years is $73,888.32. What interest…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: The term of the annuity is year(s) and month(s).

A: Annuity refers to the pattern of payment made at equal intervals. It is a type of long-term…

Q: Value of an Annuity Using the appropriate tables, solve each of the following: (Click here to access…

A: Shareholders and investors use the concept of the time value of money (TVM) to value investments…

Q: Determine the future value of the annuity due: Periodic Payment Nominal Compounding Payment ($)…

A: Payment = p = $750 Time = 6.5 * 2 = 13 semiannual Interest rate = (1 + (0.09 / 4))^(4 / 12) - 1 =…

Q: Suppose a borrower makes a $100,000 loan with annual payments at a 10 percent rate and a 10-year…

A: Annuity:   An annuity is the series of payments which is received or paid for a fixed period of…

Q: 17. Determine the periodic payment for the following deferred annuity. The annuity is an ordinary…

A: It is a case of monthly annuity payments after a deferral period. Here, the deferral period is the…

Q: A perpetuity-immediate has payments of 10 at the end of year 1, 12 at the end of year 2, and level…

A: The duration of a perpetuity is simply equal to the weighted average time to receive the cash flows,…

Q: Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of…

A: Present Value (PV) is a financial concept used to determine the current worth of a future sum of…

Q: Find the future value of the annuity due. 3) Payments of $2500 made at the beginning of each…

A: Future value of annuity due can be calculated with a payment (P) of $2500 made at the beginning of…

Q: The effective rate of interest is 5% per annum during the calendar years 2016 and 2017, and it is 9%…

A: Future Value = Present Value * (1 +Interest rate)time period

Q: Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of…

A: Annual interest rate = 12%Period = 5 yearsAnnual amount = $3200To find: PV of annuity when payments…

Q: Calculate the present value of the following annuities, assuming each annuity payment is made at the…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of…

A: Annuity refers to a stream of constant and usually fixed cash flows. Here the annual amount of $6200…

Q: Use the ordinary annuity formula shown to the right to determine the accumulated amount in the…

A: The annuity is a cash flow series wherein an equal cash flow is paid/received each period.

Q: 27. An annuity has payments of 100 at the beginning of every 2 years for 20 years. Determine the…

A: It is a problem that demands to use of the future value of the annuity method to solve it. In this…

Q: An annuity pays out on 1 January in every year, from 1 January 2011 up to (and including) 1 January…

A: The present value represents the current worth of the future expected cash flows. It is estimated by…

Q: Use the ordinary annuity formula shown to the right to determine the accumulated amount in the…

A: Principal amount = $60  Time period = 10 years  Interest rate = 5% Compounded = semi-annually

Q: 11. In the following ordinary annuity, the interest is compounded with each payment, and the payment…

A: 11. where : FV = Accumulated Amount of the annuity PMT =Payment per period =  $5500 i = interest…

Q: Find the future value of an annuity of $1400 paid at the end of each year for 15 years, if interest…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: Find the future value of an annuity of $1500 paid at the end of each year for 10 years, if interest…

A: Calculation of future value of annuity: Answer: Future value of annuity is $20,724.67

Q: An annual annuity-immediate pays $2000 at the end of the first year. The last payment is at the end…

A: The present value is the present worth of the amount that will be paid or received at future.

Q: Determine the nominal annual rate of interest of the following ordinary general annuity. Periodic…

A: When the benefits of compounding over time are taken into account, an effective annual interest rate…

Q: a. Set up an amortization schedule for a $19,000 loan to be repaid in equal installments atthe end…

A: The above question deals with the amortization of loan by way of annuity payments and observing the…

Q: Ques 17 and 18

A: Lisa's annual deposit must be approximately $245.50.Explanation:Step 1: Understand the ProblemFuture…

Q: 9) A retirement gratuity of $123 900.00 is invested in annuity deferred for 10 years. The annuity…

A: The present value of an annuity is the current worth of a cash flow paid/received at the begging of…

Q: What is the future value of a 15-year annuity of $1,700 per period where payments come at the…

A: The annuity refers to the series of cash flows that last for a limited period of time. The future…

Q: Assuming a 360-day year, when a $50,000, 90-day, 9% interest-bearing note payable matures, the total…

A: Note Payable:   A Note payable is a written promissory note which represents a specific amount of…

Q: An annuity has $159 beginning of month deposits for 10 years with a rate of interest of 6%…

A: An annuity due is a condition where the contribution is made at beginning of the period for a…

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.