Which one of the following statements regarding annuities is NOT true?OA) A joint and full survivor annuity guarantees a level payment as long as either annuitant is aliveOB) A single-premium variable deferred annuity generally permits additions to the invested amount once each yearC) A flexible premium variable annuity generally limits changes in the investment mixto some extent.D) A life annuity with ten years certain and continuous will pay benefits for at least ten years if the annuitant dies six years after the initialdistribution is made

An annuity is a financial product that provides a regular stream of income for a specified period or…

Which one of the following statements regarding annuties is NOT sue? OA) A joint and Mull survivor annuity guarantees a level payment as long as other artis OB) A single premium variable defermed annuity generally permits additions to the invested amount once each year OC) A flexible premium variable annuity generally limits changes in D) A te annuity with distribution is made years certain and continuous will pay benefits for at ext ten years if the annutat de

Which one of the following statements regarding annuties is NOT sue? OA) A joint and Mull survivor annuity guarantees a level payment as long as other artis OB) A single premium variable defermed annuity generally permits additions to the invested amount once each year OC) A flexible premium variable annuity generally limits changes in D) A te annuity with distribution is made years certain and continuous will pay benefits for at ext ten years if the annutat de

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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Calculate the value of the annuity due without a table. (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount of Payment payable Interest Value of annuity Years payment rate due 2,100 Annually 5 % acer Σ 3. %24
An annuity pays 8 at the end of each year for five years, starting atthe end of the 12th year. Determine the value of the annuity immediately beforethe first payment using an annual effective interest rate of 7%. which answer is correct in the pictures ie $15.58 or $32.80 (dont use exel in the calculation)
Annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exception occurs when the annuity payments come at the beginning of each period (termed an annuity due). What is the future value of a 15-year annuity of $1,600 per period where payments come at the beginning of each period? The interest rate is 9 percent. Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods. To find the future value of an annuity due when using the Appendix tables, add 1 to n and subtract 1 from the tabular value. For example, to find the future value of a $100 payment
Complete the ordinary annuity. (Please use the following provided Table.) Note: Do not round intermediate calculations. Amount of payment Payment payable Years Interest rate Value of annuity $ 5,000 Annually 11 4 %
Future Value of an Annuity Calculate the future value. Present Value Interest Rate $0.00 10% monthly Payments $475.00 monthly Number of Payments per Year: PY= a. Determine the annuity type. O Ordinary Simple Annuity O Ordinary General Annuity O Simple Annuity Due O General Annuity Due b. Identify the following pieces of information to be used to calculate the future value of the annuity. Periodic Payment: PMT Total Number of Payments: N= Annual Interest Rate: r = Number of Compoundings per Year: CY c. Determine the future value of the annuity. Timing of Payment Years End 19 = Future Value ???
1. Find the amount of an ordinary annuity consisting of 24 monthly payments of $150 that earn interest at 10% per year compounded monthly. Round to the nearest cent. b. Find the present value of an ordinary annuity consisting of 18 monthly payments of $150each and earning interest at 5% per year compounded monthly. Round to the nearest cent. c. True or False: The Annuities we deal with in this section are: Certain, Ordinary, and complex.
Future Value of an Annuity for Various Compounding Periods Find the future values of the following ordinary annuities. FV of $600 each 6 months for 4 years at a nominal rate of 12%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ FV of $300 each 3 months for 4 years at a nominal rate of 12%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ The annuities described in parts a and b have the same amount of money paid into them during the 4-year period, and both earn interest at the same nominal rate, yet the annuity in part b earns more than the one in part a over the 4 years. Why does this occur?
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 deposits. (Round your answer to the nearest cent.)$ Amount of Deposit m Frequency n Rate r Time t $250 semiannually 4% 30 yr
A perpetuity paying $3, 000 at the beginning of each two years has the same present value as another perpetuity with level payments, this one having payments at the end of each three years. Express the level payment amount of the second perpetuity, P, as a function of the annual effective interest rate i.
Complete the following for the present value of an ordinary annuity. (Use Table 13.2.) Note: Do not round intermediate calculations. Round your answer to the nearest cent. Amount of annuity expected $ 750 Payment Annually Time 4 years Interest rate 6 % Present value (amount needed now to invest to receive annuity)
Find the future value of an ordinary annuity if payments are made in the amount R and interest is compounded as given. Then determine how much of this value is from contributions and how much is from interest. R=16,000; 4.3% interest compounded quarterly for 11 years. The future value of the ordinary annuity is $__ (Round to the nearest cent as needed.) The amount from contributions is $__ and the amount from interest is $__. (Round to the nearest cent as needed.)
Each payment of an annuity due is compounded for one compounded for one Select- -Select- v period, so the future value of an annuity due is equal to the future value of an ordinary annuity v period. The equation is: FVAdue=FVAordinary (1 + I) The present value of an ordinary annuity, PVAN, is the value today that would be equivalent to the annuity payments (PMT) received at fixed intervals over the annuity period. The equation is: 1- (1+1)N PVAN= PMT Each payment of an annuity due is discounted for one -Select- period, so the present value of an annuity due is equal to the present value of an ordinary annuity multiplied by (1 + I). The equation is: DVA זדת

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