A 20 year annuity pays $50 at the beginning of each month during the first year, $55 at the beginning of each month during the second year, $60 at the beginning of each month during the third year, and so on. The nominal annual interest rate is 6% compounded monthly. Calculate the present value of the annuity

A 20 year annuity pays $50 at the beginning of each month during the first year, $55 at the beginning of each month during the second year, $60 at the beginning of each month during the third year, and so on. The nominal annual interest rate is 6% compounded monthly. Calculate the present value of the annuity

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 5P

See similar textbooks

Similar questions

If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
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
A perpetuity pays $ 100 each year , with the first payment scheduled two years from now . Assume that the effective annual interest rate for the next five years is 8 % , and thereafter it is 5 % . Find the present value of the perpetuity .
A 11-year annuity pays $1,400 per month, and payments are made at the end of each month. The interest rate is 12 percent compounded monthly for the first six years and 10 percent compounded monthly thereafter. What is the present value of the annuity?
A certain annuity pays $108 at the end of every 3 months. If the present value of the annuity is $1,200 and the accumulated amount is $2,000, determine the nominal rate.
An annuity provides for 12 annual payments. The first payment is $100. paid at the end of the first year, and each subsequent payment is 5.0% more than the once preceding it. Calculate the present value of this annuity if i= 7.0%.
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period.Find the accumulated amount of the annuity. (Round your answer to the nearest cent.) $1000 monthly at 6.6% for 20 years.
An annuity provides for 20 annual payments. The first payment of $ 100 is made immediately and the remaining payments increase by 15 % per year. Interest is calculated at 20 % per year. Calculate the present value of the annuity
A twenty-year annuity pays $940 per month at the end of each month. For the first seven years, the nominal interest rate is8.7% compounded monthly. For the remaining thirteen years, the nominal interest rate is12.6%, compounded monthly. What is the present value of the annuity? The present value of the annuity is
An annuity due which pays 100 per month for 12 years has a present value of 7,908. Calculate the annual effective interest rate used to determine the present I value.
Handwritten: An 11-year annuity pays $1,800 per month, and payments are made at the end of each month. The interest rate is 11 percent compounded monthly for the first six years and 10 percent compounded monthly thereafter. What is the present value of the annuity?
Find the present value of a fifteen year ordinary annuity that pays $1,340 monthly if the interest rate is 10% compounded monthly for the first 7 years, and 6% compounded monthly thereafter.