A ten-year security pays cash flows of $1,000 a year at the end of each of the next five years four years t-6, 7, 8, 9) Ten years from now 10) the security will mature and pay $10,000 pay for years 6 through 97 -1,2,3,4,5) After the fifth year, the security pays some constant cash flow at the end of the next The security sells for $30,000 and promises a rate of retum of 6% What annual cash flow does the seco

A security pays $800 every 8 years forever. The appropriate discount rate is 2% (EAR). What is the value of the security if the first payment occurs 5 years from now?

You build a retirement fund by continuously paying into the fund for 30 years, at a rate of 5,000 per year at an effective annual interest rate of 9%. After 30 years, you buy a 30-year annuity immediate with your fund at an effective annual interest rate of 8%. The annuity pays P after one year, and payments increase by 5% thereafter. Find P

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?

An annuity pays a fixed amount per year and earns a guaranteed annual return of 9 percent. It will provide 20 payments of $30,000 per year. The first payment is set to begin in 30 years. The maximum you are willing to pay for this annuity today is $ (to the nearest dollar).

A 10%, 4-year annuity pays $500.00 each year. What is the future value of the annuity?

You deposit $9500 per quartely for 1 years at i, = 8.31 %. This fund then provides for a perpetuity of $6100 per year, with the first payment made n month after the final deposit. At the time of the first perpetuity payment, interest rates fall to i, = 2.37 %. Find n. %3D Answer: 30.36

A 10-year annuity of twenty $10,000 semiannual payments will begin 12 years from now, with the first payment coming 12.5 years from now. a.If the discount rate is 8 percent compounded monthly, what is the value of this annuity 8 years from now? b.What is the current value of the annuity?

1)An asset promises to pay $60 in each of the next three years.  Assume the rate of discount is 5% for each of the years. a) Calculate its price the “long” way b) Calculate its price using the annuity formula. 2)   For the annuity in #1, what happens to it price if the rate of discount increase to 6%? 3) For the annuity in #2 what happens to it price if: a)  its maturity is raised to four years? b)  it never matures (a “perpetuity”)?

GCB has offered to grant you GHC50,000 loan with an annual interest of 24% compounded monthly to buy a house, What would be the monthly payment on the loan if the mortgage would be fully amortized in 20 years? b) Find the future and present value of a 5 year GHC1,000.00 annuity if the rate of interest is 12% and the first monthly payment is made now. c) Dividend of a share is forecasted to grow -6% next year, grow super-normally at 30% the next 3 years, and at a constant rate of 7.5% thereafter. What is the value of the stock in question if dividend paid this year is GHC4.50share and the required return is 13%. d) Calkulate the value of a 10-year, 10% S1,00.00 semisannual coupon bond if the prevailing market interest rate is 8%.