What is the future value four years from now of each of the following cash-flow streams if money can earn 5.25% compounded quarterly? the nearest cent. a) A single payment of $6,000 today. Future value = $ 0.00 b) An ordinary annuity with four annual payments of $1,700 and the first payment due a year from today. Future value = $ 0.00 your answer(s) should be rounded to

What is the future value four years from now of each of the following cash-flow streams if money can earn 5.25% compounded quarterly? the nearest cent. a) A single payment of $6,000 today. Future value = $ 0.00 b) An ordinary annuity with four annual payments of $1,700 and the first payment due a year from today. Future value = $ 0.00 your answer(s) should be rounded to

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 9PROB

See similar textbooks

Similar questions

Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
4. Calculating Annuity Present Values An investment offers $6,125 per year for 15 years, with the first payment occurring one year from now. If the required return is 8 percent, what is the value of the investment? What would the value be if the payments occurred for 40 years? For 75 years? Forever? LO 1 5. Calculating Annuity Cash Flows For each of the following annuities, calculate the annual cash flow. LO1
Question 3 (1 point) An investment is expected to result in equal payments of $ 14300.00 at the end of each semi-annual period for the next 6 years (ordinary annuity). Compounding: 2 times per year. If the appropriate required rate of return (discount rate) is 12 %, what is the present value of the annuity stream?
QUESTION 1 Investment A will make N annual payments of $300.00 with the first of the N payments due immediately. Investment A has a value of $20000.00. Investment B is an ordinary annuity that will make (N minus 1) annual payments of $300.00 with the first payment due in one year from today. If investment A and investment B have the same expected return, then what is the value of investment B? O $19700.80(plus or minus $0.10) O $19700.00(plus or minus $0.10) O $19701.70(plus or minus $0.10) O $19701.10(plus or minus $0.10) O None of the above is within $0.10 of the correct answer
eo Find the present value of a growing annuity that pays year-end cash flows for each of the next 19 years. The cash flow at the end of the first year will be $2,000, and future cash flows will grow by 2% per year. Assume a discount rate of 4%. Round your answer to two decimal places. Attemp 53 Mi
Time for a lump sum to double: If you deposit money today in an account that pays 6.5% annual interest, how long will it take to double your money? Future value -- annuity versus annuity due: What is the future value of a 7%, 5 year ordinary annuity that pays $300 each year? If this were an annuity due, what would its future value be? Present and future values of a cash flow stream: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 8% annually, what is its present value? Its future value? Loan amortization and EAR: You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized over 5 years (60 months), and the nominal interest rate would be 12%, with interest paid monthly. What would be the monthly loan payment? What would be the loan’s EAR? Present value of a perpetuity: What s the present value of a $100…
Question 1 Assume you are planning to invest $5,700 each year for six years and will earn 7% per year. Determine the future value of this annuity due problem if your first $5,700 is invested now. Please show each step of your calculation.
Suppose that you have inherited an annuity with the parameters given below. What is the present value of this annuity? Round your final answer to two decimals First payment: First payment occurs: Constant payment growth rate: Payment frequency: Cost of Capital: Term: Present value 424.00 2 years from now 1% Annually Annual 8% Annually 18 Years
Q: Suppose you invest $210,000 in an annuity that returns constant annual payments over 6 years, with the first payment one year from now. At an interest rate of 7%, how much is the annual payment you receive? Equivalent problem structure (as a borrower): Suppose you borrow $210,000 to be paid back in constant annual payments over 6 years with the first payment one year from now. At an interest rate of 7%, how much is the annual payment? Please round your answer to the nearest hundredth Open Formula Summary in separate tab Open Glossary in separate tab Show navigation tips C
8. Present value of annuities and annuity payments The present value of an annuity is the sum of the discounted value of all future cash flows. You have the opportunity to invest in several annuities. Which of the following 10-year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate. O An annuity that pays $500 at the end of every six months O An annuity that pays $1,000 at the beginning of each year O An annuity that pays $1,000 at the end of each year O An annuity that pays $500 at the beginning of every six months An ordinary annuity selling at $11,417.87 today promises to make equal payments at the end of each year for the next six years (N). If the annuity's appropriate interest rate (I) remains at 9.50% during this time, the annual annuity payment (PMT) will be You just won the lottery. Congratulations! The jackpot is $35,000,000, paid in six equal annual payments. The first payment on the lottery jackpot will be made…