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:B. Directions: Solve the following problems completely. Find the period of deferral in each
of the following deferred annuity.
a) Monthly payments of P 2,000 for 5 years that will start 7 months from now.
b) Annual payments for P 8,000 for 12 years that will start 5 years from now.
c) Quarterly payments of P 5,000 for 8 years that will start two years from now.
d) Semi-annual payments ofP 60,000 for 3 years that will start 5 years from now.
e) Payments of P 3,000 every 2 years for 10 years starting at the end of 6 years.
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- A company wants to have $20,000 at the beginning of each 6-month period for the next 4years. If an annuity is set up for this purpose, how much must be invested now if the annuity earns 6.31%, compounded semiannually? (a) Decide whether the problem relates to an ordinary annuity or an annuity due. ordinary annuityannuity due (b) Solve the problem. (Round your answer to the nearest cent.)arrow_forwardSomeone needs to make the following annuity payments to an individual: £445 paid at the end of each month during the first 15 years and then £448 paid at the end of each 4 months for the following 8 years. Assuming an effective monthly interest rate of 1.3% throughout the entire period, how much total fund the insurer needs to hold today in order to meet these payments? correct answer = 31470.44, NO TABLES, ONLY FORMULAS, PLEASEarrow_forwardUse graphical approximation techniques or an equation solver to approximate the desired interest rate. A person makes annual payments of $1000 into an ordinary annuity. At the end of 5 years, the amount in the annuity is $5700.46. What annual nominal compounding rate has this annuity earned? Type the interest rate: % (Round to 2 decimal places.)arrow_forward
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