The future value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively. Introduction : Time value of money is the idea that the estimation of a dollar to be received in future is not as much as the estimation of a dollar presently. One reason is that the cash received presently can be contributed consequently for producing more cash. An annuity is a form of financial contract that are typically used for retirement plans by the insurance companies which assures guaranteed payment to the insurer. It is paid by the insurance company for a certain period of time or on lifetime basis.

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Answer 1

Question

Chapter 5, Problem 5.21P

a.

Summary Introduction

To Determine: The future value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

Introduction: Time value of money is the idea that the estimation of a dollar to be received in future is not as much as the estimation of a dollar presently. One reason is that the cash received presently can be contributed consequently for producing more cash. An annuity is a form of financial contract that are typically used for retirement plans by the insurance companies which assures guaranteed payment to the insurer. It is paid by the insurance company for a certain period of time or on lifetime basis.

b.

Summary Introduction

To Determine: The annuity which has higher future value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

c.

Summary Introduction

To Determine: The present value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

d.

Summary Introduction

To Determine: The annuity which has higher present value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

e.

Summary Introduction

To Determine: Comparing and contrasting the differences using the findings from part b and d.

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Answer 2

Question

Chapter 5, Problem 5.21P

a.

Summary Introduction

To Determine: The future value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

Introduction: Time value of money is the idea that the estimation of a dollar to be received in future is not as much as the estimation of a dollar presently. One reason is that the cash received presently can be contributed consequently for producing more cash. An annuity is a form of financial contract that are typically used for retirement plans by the insurance companies which assures guaranteed payment to the insurer. It is paid by the insurance company for a certain period of time or on lifetime basis.

b.

Summary Introduction

To Determine: The annuity which has higher future value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

c.

Summary Introduction

To Determine: The present value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

d.

Summary Introduction

To Determine: The annuity which has higher present value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

e.

Summary Introduction

To Determine: Comparing and contrasting the differences using the findings from part b and d.

Expert Solution & Answer

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Answer 3

Question

Chapter 5, Problem 5.21P

a.

Summary Introduction

To Determine: The future value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

Introduction: Time value of money is the idea that the estimation of a dollar to be received in future is not as much as the estimation of a dollar presently. One reason is that the cash received presently can be contributed consequently for producing more cash. An annuity is a form of financial contract that are typically used for retirement plans by the insurance companies which assures guaranteed payment to the insurer. It is paid by the insurance company for a certain period of time or on lifetime basis.

b.

Summary Introduction

To Determine: The annuity which has higher future value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

c.

Summary Introduction

To Determine: The present value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

d.

Summary Introduction

To Determine: The annuity which has higher present value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

e.

Summary Introduction

To Determine: Comparing and contrasting the differences using the findings from part b and d.

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Answer 4

Question

Chapter 5, Problem 5.21P

a.

Summary Introduction

To Determine: The future value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

Introduction: Time value of money is the idea that the estimation of a dollar to be received in future is not as much as the estimation of a dollar presently. One reason is that the cash received presently can be contributed consequently for producing more cash. An annuity is a form of financial contract that are typically used for retirement plans by the insurance companies which assures guaranteed payment to the insurer. It is paid by the insurance company for a certain period of time or on lifetime basis.

b.

Summary Introduction

To Determine: The annuity which has higher future value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

c.

Summary Introduction

To Determine: The present value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

d.

Summary Introduction

To Determine: The annuity which has higher present value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

e.

Summary Introduction

To Determine: Comparing and contrasting the differences using the findings from part b and d.

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Answer 5

Chapter 5, Problem 5.21P

a.

Summary Introduction

To Determine: The future value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

Introduction: Time value of money is the idea that the estimation of a dollar to be received in future is not as much as the estimation of a dollar presently. One reason is that the cash received presently can be contributed consequently for producing more cash. An annuity is a form of financial contract that are typically used for retirement plans by the insurance companies which assures guaranteed payment to the insurer. It is paid by the insurance company for a certain period of time or on lifetime basis.

b.

Summary Introduction

To Determine: The annuity which has higher future value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

c.

Summary Introduction

To Determine: The present value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

d.

Summary Introduction

To Determine: The annuity which has higher present value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

e.

Summary Introduction

To Determine: Comparing and contrasting the differences using the findings from part b and d.

Answer 6

Chapter 5, Problem 5.21P

a.

Summary Introduction

To Determine: The future value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

Introduction: Time value of money is the idea that the estimation of a dollar to be received in future is not as much as the estimation of a dollar presently. One reason is that the cash received presently can be contributed consequently for producing more cash. An annuity is a form of financial contract that are typically used for retirement plans by the insurance companies which assures guaranteed payment to the insurer. It is paid by the insurance company for a certain period of time or on lifetime basis.

Answer 7

Chapter 5, Problem 5.21P

a.

Summary Introduction

To Determine: The future value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

Introduction: Time value of money is the idea that the estimation of a dollar to be received in future is not as much as the estimation of a dollar presently. One reason is that the cash received presently can be contributed consequently for producing more cash. An annuity is a form of financial contract that are typically used for retirement plans by the insurance companies which assures guaranteed payment to the insurer. It is paid by the insurance company for a certain period of time or on lifetime basis.

Answer 8

b.

Summary Introduction

To Determine: The annuity which has higher future value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

Answer 9

b.

Summary Introduction

To Determine: The annuity which has higher future value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

Answer 10

c.

Summary Introduction

To Determine: The present value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

Answer 11

c.

Summary Introduction

To Determine: The present value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

Answer 12

d.

Summary Introduction

To Determine: The annuity which has higher present value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

Answer 13

d.

Summary Introduction

To Determine: The annuity which has higher present value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

Answer 14

e.

Summary Introduction

To Determine: Comparing and contrasting the differences using the findings from part b and d.

Answer 15

e.

Summary Introduction

To Determine: Comparing and contrasting the differences using the findings from part b and d.

Answer 16

Expert Solution & Answer

Answer 17

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Answer 18

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Answer 19

Ch. 5.1 - What is the difference between future value and...Ch. 5.1 - Define and differentiate among the three basic...Ch. 5.2 - Prob. 5.3RQ Ch. 5.2 - Prob. 5.4RQ Ch. 5.2 - Prob. 5.5RQ Ch. 5.2 - Prob. 5.6RQ Ch. 5.2 - Prob. 5.7RQ Ch. 5.3 - What is the difference between an ordinary annuity...Ch. 5.3 - What are the most efficient ways to calculate the...Ch. 5.3 - How can the formula for the future value of an...

To Determine: The annuity which has higher future value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

To Determine: The present value of two annuities at the end of year 10 if the annual interest rate is (1) 10% and (2) 20% respectively.

To Determine: The annuity which has higher present value at the end of 10 years with both (1) 10% and (2) 20% by using the findings from part a.

To Determine: Comparing and contrasting the differences using the findings from part b and d.

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Chapter 5 Solutions