Susan has a choice between two perpetuities payable at the beginning of every month. The first pays $100 today and increases by 1% every month. The second pays $100 today and increases by $X every month. These two annuities are equally valuable at i= 20%. Find X.
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- Two annuity dues in perpetuity have a common present value of $2, 000 and a common effective annual interest rate i. The first annuity makes payments of $100 at the beginning of every three years and the second makes payments of X at the beginning of every three months. Find X.Calculate the present value of an annuity with monthly deposits of $2,000 at 5% for 20 years. Discuss how the present value of an annuity will change if the deposit is doubled?You are planning to have some retirement income and want to retire in 15 years. Until then you will need to make 15 annual deposits into an account. The first deposit is $5k, and each subsequent deposit will increase at a 4% rate. Then come the good days, you retire, and you can have 20 equal annual withdrawals of $H (last withdrawal at the end of year 35). The interest rate is 6% (compounded annually). Calculate H, and draw the cash flow diagram.
- Explain the term Present Value of Perpetuities?What is the current net single premium value of the 4-year periodic life annuity with increasing payments for a 30-year-old individual: 30 TL per month for the first year, 40 TL per month for the second year, 50 TL per month for the third year and 60 TL per month for the fourth year? please dont use excel. answer with detail.no discount rateSmith has 100000 with which she buys a perpetuity on january 1,2005.Suppose that i=0.045 and the perpeuity has annual payments begining january 1,2006.The first three payments are 2000 each,the next three payments are 2000(1+r)each,....,increasing forever by a factor of 1+r every three years.What is r ? (Please post with mathematical formulas)
- How much do you need to save each year for 30 years in order to have $775,000, assuming you are investing the money in an account that earns 8%? How much of the $750,000 comes from principal (your out of pocket costs)?You plan to deposit $300 each year into an IRA earning 4% interest annually. How much will you have in your account in 20 years? Your Answer: Answerfind the present value of $175 perpetuity if the interest rate is 6 percent compounded quarterly. payments are at the beginning of the period.
- June has a small house, on a small street, in a small town. If she sells the house now, she will likely get $110, 000 for it. If she waits one year, she will probably receive more- say, $120,000. If she sells the house now, she can invest the money in a 1-year guaranteed growth bond that pays 8% annual interest, compounded monthly. What are the 2 options worth, and which should she choose?Investments Jack invests $1000 at a certain annual interest rate, and he invests another $2000 at an annual rate that is one-half percent higher. If he receives a total of $190 interest in I year, at what rate is the $1000 invested?Josh is required to pay P57,000 in 15 days or P60,000 in 60 days. Find theannual rate of interest