1. An ordinary annuity has cash flows at the end of each period. True or False 2. Compounding interest means that interest will generate in every time period. True or False 3. The present value of a $100 perpetuity discounted at 10% is $1,000. True or False 4.
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- Suppose you bought a 25-year annuity of $7,900 per year at the current discount rate of 12 percent per year. a. What is the value of your annuity today? (Do not round intermediate calculations and round your answer to 2 decimal places b. What is the present value if interest rates suddenly drop to 7 percent? c. What is the present value if interest rate suddenly rise to 17 percent?Suppose you just bought an annuity with 10 annual payments of $16,500 at a discount rate of 13.75 percent per year. a. What is the value of the investment at the current interest rate of 13.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What happens to the value of your investment if interest rates suddenly drop to 8.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What happens to the value of your investment if interest rates suddenly rise to 18.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.Suppose you just bought an annuity with 12 annual payments of $15,700 at a discount rate of 11.75 percent per year. a. What is the value of the investment at the current interest rate of 11.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What happens to the value of your investment if interest rates suddenly drop to 6.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What happens to the value of your investment if interest rates suddenly rise to 16.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a. Present value at 11.75 percent b. Present value at 6.75 percent $ 124,187.88 153,795.59 c. Present value at 16.75 percent $ 97,472.81
- Suppose you are going to receive $13,300 per year for five years. The appropriate discount rate is 8.2 percent. a-1. What is the present value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2. What is the present value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b-1. Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-2. Suppose you plan to invest the payments for five years. What is the future value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 16.) a-1. Present value a-2. Present value b-1. Future value b-2. Future value < Prev 8 of 10 NextThe 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 beginning of every six months 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 An ordinary annuity selling at $4,947.11 today promises to make equal payments at the end of each year for the next eight years (N). If the annuity's appropriate interest rate (1) remains at 6.50% during this time, the annual annuity payment (PMT) will be You just won the lottery. Congratulations! The jackpot is $35,000,000, paid in eight equal annual payı The first payment on the lottery jackpot will be made today. In present value terms, you really won -assuming…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 An annuity that pays $500 at the beginning of every six months An annuity that pays $1,000 at the end of each year. An annuity that pays $1,000 at the beginning of each year An ordinary annuity selling at $14,130.15 today promises to make equal payments at the end of each year for the next twelve years (N). If the annuity's appropriate interest rate (I) remains at 8.00% during this time, the annual annuity payment (PMT) will be You just won the lottery. Congratulations! The jackpot is $85,000,000, paid in twelve equal annual payments. The first payment on the lottery jackpot will be made today. In present value terms, you really won…
- 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. An annuity that pays $500 at the end of every six months An annuity that pays $1,000 at the end of each year An annuity that pays $1,000 at the beginning of each year*** This is the correct option**** An annuity that pays $500 at the beginning of every six months A. An ordinary annuity selling at $2,514.15 today promises to make equal payments at the end of each year for the next eight years (N). If the annuity’s appropriate interest rate (I) remains at 8.00% during this time, the annual annuity payment (PMT) will be . B. You just won the lottery. Congratulations! The jackpot is $10,000,000, paid in eight equal annual payments. The…Please correct with steps, all parts1.
- Solve the problem. solve using the formula for the future value of an ordinary annuity. given the monthly payment, capital, the annual interest rate, are, and the number of monthly payments, antique, find the future value of the annuity. R=$1300; r = 8.5%; nt= 17 A) $24,398.04 B) $17,548.36 C) $23,397.81 D) $24,198.38 Please search only correct answer as I am | paying for this and I keep receiving incorrect oneSuppose you just bought an annuity with 11 annual payments of $16,400 at a discount rate of 13.5 percent per year. What is the value of the investment at the current interest rate of 13.5 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What happens to the value of your investment if interest rates suddenly drop to 8.5 percent? Note: Do not round intermediate calculations and roundSuppose you are going to receive $13,500 per year for five years. The interest rate is 8.4%a. What is the present value of the payments if they are in the form of an ordinary annuity? What is the present value if the payments are an annuity due?b. Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? What if the payments are annuity due?c. Which has the highest present value (future value), the ordinary annuity or annuity due?
