Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:A 10-year annuity of $5,000 annual payments begins in 6 years. The discount rate is 10%,
compounded annually. What is its value today? What is its value in 7 years?
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- An annuity has payments at the beginning of every three months starting today. The first payment is $100 and payments increase by 1% every three months for the first four years, making the 16th payment $116.10 to the nearest cent. After this, payments increase by $1 every three months for 32 additional payments, making 48 payments in total. If d (5) = 5.5%, find the present value of this annuity.arrow_forwardA five-year annuity of 10 $7,500 semiannual payments will begin 10 years from now, with the first payment coming 11 years from now. If the discount rate is 6 percent compounded monthly, what is the value of this annuity five years from now? What is the value three years from now? What is the current value of the ‘ annuity?arrow_forwardWhat is the future value of an annuity of 15 deposits of $6407 at the end of each year with a nominal rate of interest of 5%, compounded continuously, in 21 years?arrow_forward
- Estimate the present value of an annuity if payments are $1000 monthly for 15 years and the account earns interest at the rate of 10%/yr compounded continuously. (Round your answer to two decimal places.)$arrow_forwardAn annuity with yearly payments of 674 that’s compounded annually with an interest rate of 5.4% will be what balance after 18 years?arrow_forwardA 20-year annuity of forty $7,000 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now. a. If the discount rate is 11 percent compounded monthly, what is the value of this annuity 4 years from now? b. What is the current value of the annuity?arrow_forward
- What is thevpresent value of an annuity of 1,600 per year for 10 years, with the first payment occurring at the end of year 10 ( that is, ten 1,600 payments occurring at the end of year 10 through year 19), given a discount rate of 9 percent?arrow_forwardAn annuity pays $15 per year for 60 years. What is the future value of this annuity at the end of that 60years given that the discount rate is 7%?arrow_forwardGiven an annuity-immediate of 100 payable semi-annually for 10 years. Find the value after 18 years if the interest rate is 8% compounded semi-annually.arrow_forward
- Find the present value of the ordinary annuity with annual payment of $400 made at the start of each year for 10 years. with an annual rate of 10%arrow_forwardHow much more is a perpetuity of $ 1000 worth than an anuity of the same amount for 25 years? Assume an interest rate of 15% and cash flows at the end of each period?arrow_forwardThe monthly compounded interest rate is 10%. What is the effective annual interest rate and what is the present value of an annuity cashflow stream of $100 to be received every quarter for the next three years? Give answers to two decimal places and show all your workings.arrow_forward
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