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- vear fromLIow. urn I, Wa. the payments occurred i orever? 5. Caiculating Annuity Cash Flows. If you put up $20,000 today in exchange for a 8.5 percent, 12-year annuity, what will the annual cash flow be?How much would you be willing to spend for an annuity that pays $2,500 at the end of each year for three years, assuming you could earn 5.5% on other LIET similar investments? Select one: O a. $5,494 O b. $4,783 O c. $6,087 O d. $6,408 O e. $6,745 ہے5. Ms. Saver expects to receive a deferred annuity of $20,000 a year for 10 years that is deferred 5 years. What is the present value of the annuity if money is worth 8%? a. $91,335.00 b. $171,190.00 c. $85,030.00 d. $36,988.00
- d. Calculate the future sum of $1,000, given that it will be held in the bank for 5 years earning an APR of 10 percent compounded semiannually. e What is an annuity due? How does this differ from an ordinary annuity? f. What is the present value of an ordinary annuity of $1,000 per year for 7 years discounted back to the present at 10 percent? What would be the present value if it were an annuity due?5. Christopher is retiring and wants to set up a 20-year annuity with $120 000 of his savings. The annuity earns 8.7% per year compounded quarterly. How much will Christopher receive every 3 months? a. $4522.43 b. $3178.37 c. $5487.78 d. $5107.90 kas done qu ASU on hments ve o e. none of the above e abl o Renee Saviour1. Today, the maximum amount of money that Ramesh is willing to pay for a certain perpetuity is $2,000. Assuming the interest rate and the annual payments remain the same, what is the maximum amount of money that Ramesh should be willing to pay for the same perpetuity exactly two years from today? a. Any amount greater than $2000.00 but less than $2332.80, if the discount rate is more than 8% p.a. \ b. Any amount greater than $1714.68 but less than $2000.00 if the discount rate is less than 8% p.a. c. Any amount less than $1714.68 if the discount rate is less than 8% p.a. d. Any amount greater than $2332.80 if the interest rate is more than 8% p.a. e. None of the answers listed above is correct.
- K ces Mary is going to receive a 32-year annuity of $9,700 per year. Nancy is going to receive a perpetuity of $9,700 per year. If the appropriate interest rate is 10 percent, how much more is Nancy's cash flow worth? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present valueook ences Chris Seals has just given an insurance company $62,525. In return, she will receive an annuity of $7,458 for 12 years. a. At what rate of return must the insurance company invest this $62,525 to make the annual payments? (Use a Financial calculator to arrive at the answers. Round the final answer to 3 decimal places.) Rate of return b. What rate of return is required if the annuity is payable at the beginning of each year? (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.) Rate of return2. Mr. and Mrs. Rich are interested in purchasing an annuity that will pay them $2,500.00 per month starting next month for 25 years. If the best rate of return that they could get is 4.65% compounded semi-annually, calculate using both the algebraic and the calculator method, a) how much should they pay now for this annuity? P/Y C/Y I/Y PV PMT FV b) Calculate the total interest paid over the term of the annuity. P/Y C/Y N I/Y PV PMT FV
- if the annual rate is 5% and the annual infinity (forever) payment is $200, what is the present value of perpetuity? a. $4000 b. $10 c. $1000 d. $40What’s the present value of a perpetuity that pays Php250 per year if the appropriate interest rate is 4.76%? A. Php4,750 B. Php5,000 C. Php5,250 D. Php5,513 E.Php5,788What's the present value of a perpetuity that pays $2,200 per year if the appropriate interest rate is $%? O $47,960.00 $49,720.00 O $48,400.00 $44,000.00 $36,520.00 4