Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You agree to repay a loan over five years with the following stream of cash payments: $1,000; $1,100; $1,250; $1,280; and $1,300. If you wish to discount these payments to their present value today using 4%, why can you not use one
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- Please use a physical TIMELINE to solve.arrow_forwardSuppose you are going to receive $11,000 per year for 8 years. The appropriate interest rate is 11 percent per year. Requirement 1: What is the present value of the payments if they are in the form of an ordinary (a)annuity (cash flow starts at the end of the first compounding period)? (Click to select) (b) What is the present value if the payments are an annuity due (cash flow starts at the beginning of the first compounding period)? (Click to select) Requirement 2: (a)Suppose you plan to invest the payments for 8 years, what is the future value if the payments are an ordinary annuity? (Click to select) (b)Suppose you plan to invest the payments for 8 years, what is the future value if the payments are an annuity due? (Click to select)arrow_forwardI need the answer as soon as possiblearrow_forward
- What is the future value of a 6%, 5-year ordinary annuity that pays $450 each year? Do not round intermediate calculations. Round your answer to the nearest cent. If this were an annuity due, what would its future value be? Do not round intermediate calculations. Round your answer to the nearest centarrow_forward(Present value of a perpetuity) At a discount rate of 13.00%, find the present value of a perpetual payment of $1,500 per year. If the discount rate were lowered to 6.50%, half the initial rate, what would be the value of the perpetuity? a. If the discount rate were 13.00%, the present value of the perpetuity is $ (Round to the nearest cent.) b. If the discount rate were lowered to 6.50%, half the initial rate, the present value of the perpetuity is $ (Round to the nearest cent.)arrow_forwardIf you start making $60 monthly contributions today and continue them for five years, what's their future value if the compounding rate is 10.25 percent APR? What is the present value of this annuity? Note: Do not round intermediate calculations and round your final answers to 2 decimal places.arrow_forward
- What's the present value of a $890 annuity payment over six years if interest rates are 10 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present valuearrow_forwardFind the payment that should be used for the annuity due whose future value is given. Assume that the compounding period is the same as the payment period. $21,000; monthly payments for 12 years; interest rate 5.3% The payment should be $ (Round to the nearest cent as needed.)arrow_forwardWhat is the future value of a 7%, 5-year ordinary annuity that pays $650 each year? Do not round intermediate calculations. Round your answer to the nearest cent. $ If this were an annuity due, what would its future value be? Do not round intermediate calculations. Round your answer to the nearest cent. $arrow_forward
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