You are offered a court settlement in the following terms: you will receive 4 equal payments of $7,958 each every year, with the first payment being made 3 years from now. The current annual interest rate is 4%. Assume yearly compounding. What is this settlement worth in present value terms? Enter your answer in the form of dollars, rounded to the nearest cent, and without the dollar sign ('$').

You are offered a court settlement in the following terms: you will receive 4 equal payments of $7,958 each every year, with the first payment being made 3 years from now. The current annual interest rate is 4%. Assume yearly compounding. What is this settlement worth in present value terms? Enter your answer in the form of dollars, rounded to the nearest cent, and without the dollar sign ('$').

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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Similar questions

4. You are a personal injury attorney and the court orders the insurance company to pay your client an annuity-immediate which has semi-annual payments of $100,000 for 25 years. Assuming the annuity earns an interest rate of 6% convertible quarterly, calculate your portion of the settlement if you will receive 35% of the present value of the annuity immediate.
What is the present value of a perpetuity that pays $661 every year forever, if the interest rate is to be 2.25% (compounded). Answer to the nearest cent. A Moving to the next question prevents changes to this answer.
you are going to receive three perpetuities. perpetuity one will pay $550 each year with the first payment to be paid at your one. perpetuity to pay $750 each year with the first payment to be paid at yr 15. perpetuity three will Pay $850 each year with the first payment to be made at yr 31. the effective annual interest rate is 8.58%. find the combined value of these three perfect two ities evaluated at year 25
Emit wants to make an initial payment P at Year 0 hoping to get $400 annually from Year 5 to Year 10 (6 Years). How much should the initial payment be at an 8% interest rate?
If you put $1,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in 7 years? Round the answer to the nearest cent. Round FV-factor to three decimal places or use the Appendix A . (Hint: Use the future value formula.) $ How much interest will you earn during the 7 years? Round the answer to the nearest cent. $ If you put $1,000 at the end of each year into a savings account that pays interest at the rate of 3 percent a year, how much would you have after 7 years? Use the Appendix B . Round the answer to the nearest cent. Round FV-factor to three decimal places. $
Suppose you are offered the alternative of receiving either $3,000 at the end of 8 years or $2,000 today. What interest would make you indifferent to your choice between $2,000 and the promise of $3,000 at the end of eight years?
If you start making $60 monthly contributions today and continue them for five years, what's their future value if the compounding rate is 10.25 percent APR? What is the present value of this annuity? Note: Do not round intermediate calculations and round your final answers to 2 decimal places.
Find the payment that should be used for the annuity due whose future value is given. Assume that the compounding period is the same as the payment period. $21,000; monthly payments for 12 years; interest rate 5.3% The payment should be $ (Round to the nearest cent as needed.)
(Annuity interest rate) You've been offered a loan of $40,000, which you will have to repay in 7 equal annual payments of $8,000, with the first payment due one year from now. What interest rate would you pay on that loan? The interest rate you would pay on the loan is%. (Round to two decimal places.)
You are depositing $10,000 in a 5 year CD that pays 4.5% interest each year. How much interest will you accrue if you hold the CD until maturity? Show work. (Yes, this is compounding interest).
You have an opportunity to buy a perpetuity that pays $400 a year forever starting a year from now for $1,500. What interest rate makes this a fair price? Instruction: Round to three decimal places. E.g., if your answer is 0.0106465 or 1.06465%, you should type ONLY the number .011, neither 0.0106465, 0.0106, nor 1.065. Otherwise, Blackboard will treat it as a wrong answer.

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