You are golng to receive three perpetulties. Perpetuity 1 will pay $450 each year,with the first payment to be pald at Year 1. Perpetuity 2 will pay $650 each year, withthe first payment to be paid at Year 15. Perpetuity 3 will pay $750 each year, with thefirst payment to be paid at Year 31. The effective annual Interest rate is 8.58 percent.Find the combined value of these three perpetuities, evaluated at Year 25.your answer to the nearest cent, with no punctuation other than a decimal. Forexample, if your answer is $28,542.19, enter "28542.19". Note that Canvas willEnterdelete trailing zeros, if entered.

There are 3 annuities. We need to compute the present value of these annuities first and then we can…

Answered: You are golng to receive three…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

A 20-year annuity was purchased with $180,000 that had accumulated in an RRSP. The annuity provides a semiannually compounded rate of return of 5% and makes equal month-end payments. How much interest will be paid in the sixth year?
The compounding periods and the payment periods are the same for an annuity and for an amortization. Determine the present value of the annuity that will pay the given periodic payments. (Round your final answer to two decimal places.) Monthly payments of $310.80 for 4 years at 5.4% interest.
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.
You have your choice of two investment accounts. Investment A is a 9-year annuity that features end-of-month $2,800 payments and has an APR of 7 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an APR of 9 percent, also good for 9 years. How much money would you need to invest in B today for it to be worth as much as Investment A 9 years from now? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present value
A company needs to buy an annuity package that will provide a future income to an individual over a 33-year period at the following levels: £4421 paid at the beginning of each year for the first 13 years followed by £3318 paid at the beginning of each year up until year 33 (inclusive). Calculate in £s, to 2 decimal places, the price of this investment in order to assure the required payments, given that the rate of interest during this period is: 4.0% pa effective for the first 20 years and then 7.1% pa effective thereafter. (correct answer = 71829.14, ONLY formulas, no tables, please)
The effective rate of interest is 4% per annum. Calculate the value at the start of the payment stream of an annuity paying 800 annually in advance for 12 years.
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the required payment for the sinking fund. (Round your answer to the nearest cent.) Yearly deposits earning 12.3% to accumulate $7500 after 12 years.
Joe can purchase one of two annuities: Annuity 1: A 10-year decreasing annuity-immediate, with annual payments of 10, 9, 8, 1. Annuity 2: A perpetuity-immediate with annual payments. The perpetuity pays 1 in year 1, 2 in year 2, 3 in year 3., and 11 in year 11. After year 11, the payments remain constant at 11. At an annual effective interest rate of i, the present value of Annuity 2 is twice the present value of Annuity 1. Calculate the value of Annuity 1. A 8 с D 36.4 37.4 38.4 394
Someone needs to buy an annuity package that will provide a future income to an individual over a 42-year period at the following levels: £3452 paid at the beginning of each year for the first 10 years followed by £3384 paid at the beginning of each year up until year 42 (inclusive). Calculate, the price of this investment in order to assure the required payments, given that the rate of interest during this period is: 4.4% pa effective for the first 20 years and then 8.7% pa effective thereafter correct answer = 61939.72, NO TABLES, ONLY FORMULAS, PLEASE
A 20-year annuity was purchased with $180,000 that had accumulated in an RRSP. The annuity provides a semiannually compounded rate of return of 5% and makes equal month-end payments. What will be the principal portion of Payment 134?
A 20-year annuity X has annual payments of $10,000 at the beginning of each year for 10 years, then annual payments of $20,000 at the beginning of each year for the next 10 years. A perpetuity Y has payments of Q at the end of each year for 10 years, then payments of 2Q at the end of each year thereafter. The present values of X and Y are equal when calculated using an annual effective interest rate of 5%. Find Q.
You receive a 10-year subsidized student loan of $19,000 at an annual interest rate of 6.8%. What are your monthly loan payments for this loan when you graduate? (Round your answer to the nearest cent.)

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