Problem 2-21 Discount factors and annuity factorsa. If the one-year discount factor is 0.9200, what is the one-year interest rate? (Do not round intermediate calculations. Enter youranswer as a percent rounded to 2 decimal places.)b. If the two-year interest rate is 8.7%, what is the two-year discount factor? (Do not round intermediate calculations. Round youranswer to 4 decimal places.)c. Given these one- and two-year discount factors, calculate the two-year annuity factor. (Do not round intermediate calculations.Round your answer to 4 decimal places.)d. If the PV of $10 a year for three years is $25.45, what is the three-year annuity factor? (Do not round intermediate calculations.Round your answer to 4 decimal places.)e. From your answers to (c) and (d), calculate the three-year discount factor. (Do not round intermediate calculations. Round youranswer to 4 decimal places.)a.Interest rate%b. Discount factorc. Annuity factord. Annuity factore.Discount factor

Answered: a. If the one-year discount factor is…

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 14.20EX

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a. If the one-year discount factor is 0.9217, what is the one-year interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. If the two-year interest rate is 8.5%, what is the two-year discount factor? (Do not round intermediate calculations. Round your answer to 4 decimal places.) c. Given these one- and two-year discount factors, calculate the two-year annuity factor. (Do not round intermediate calculations. Round your answer to 4 decimal places.) d. If the PV of $10 a year for three years is $25.54, what is the three-year annuity factor? (Do not round intermediate calculations. Round your answer to 4 decimal places.) e. From your answers to (c) and (d), calculate the three-year discount factor. (Do not round intermediate calculations. Round your answer to 4 decimal places.) a. Interest rate % b. Discount factor c. Annuity factor d. Annuity factor e. Discount factor
Question 3 (25 points): If the present value of a perpetuity is given by: where C is the periodic payments and r is the discount rate. Show that the present value of an annuity of n years is given by: 1 C - (1 + r)]
Question 5 What is the present value of a $360 payment in one year when the discount rate is 9 percent? (Round your answer to 2 decimal places.) Future value
Question 7 of 10 > Every year you deposit $3,400 into an account that earns 2% interest per year. What will be the balance of your account immediately after the 20th deposit? Click the icon to view the interest and annuity table for discrete compounding when i = 2% per year. Choose the correct answer below O A. $79,464 O B. $68,000 OC. $82,611 OD. $51,438 O E $84,263
Question content area top Part 1 (Present value of a perpetuity) At a discount rate of 17.50%, find the present value of a perpetual payment of $2,500 per year. If the discount rate were lowered to 8.75%, half the initial rate, what would be the value of the perpetuity? Question content area bottom Part 1 a. If the discount rate were 17.50%, the present value of the perpetuity is $enter your response here. (Round to the nearest cent.) Part 2 b. If the discount rate were lowered to 8.75%, half the initial rate, the present value of the perpetuity is $enter your response here. (Round to the nearest cent.)
QUESTION 7 What is the present value (PV) today of a stable perpetuity that pays $11,000 every 3 years, starting 7 years from today? The appropriate annual discount rate is 12% p.a. Round your answer to the nearest dollar. Do not include the S symbol nor the separating comma, if any. Thus, for example, if the PV is $24,323.55 write 24324 in the answer box. IMPORTANT: Use at least 4 decimals in all your intermediate calculations. In the case of a discount rate, the 4-decimal requirement applies to the percentage version; that is, the decimal version would have 6 decimals. For example, 1.2345% would become 0.012345. Write your answer rounded to the dollar; e.g., 6543 (Acceptable error = 200)
Question 14.11 Consider two annuities that have the same yield and make annual payments. The first annuity is a level 3-year annuity-due, and its Macaulay duration is 0.96. The second annuity is a level 4-year annuity-due, and its Macaulay duration is X. Calculate X. A 1.1 B 1.3 C 1.4 D 2.0 E 2.4
Question 3 A deposit of $330 earns the following interest rates: 8 percent in the first year. 6 percent in the second year. 5 percent in the third year. What would be the third year future value? (Round your answer to 2 decimal places. Future Value
Question 14.05 Consider two annuities that have the same yield and make annual payments. The first annuity is a level n-year annuity-due, and its Macaulay duration is 3. The second annuity is a level n-year annuity-immediate, and its Macaulay duration is X. E 4.50 Calculate X. A 3.00 B 3.25 C 3.50 D 4.00
Question Suppose that a perpetual annuity has a present value of $33 million. What interest rate r would allow for perpetual annual payouts of $1.8 million? Express the interest rate as a decimal rounded to three decimal places. Do not include the dollar sign in your answer. Provide your answer below: ● Il CURMIT
which one is correct please confirm? QUESTION 31 What is the effective rate of interest on a CD that has a nominal rate of 9.5 percent with interest compounded monthly? a. 9.86% b. 9.93% c. 10.02% d. 9.74%
a. If the present value of $153 is $139, what is the discount factor? (Round your answer to 4 decimal places.) Discount Factor 0.9084 b. If that $153 is received in year 5, what is the interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Interest rate %

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