Find the NPV and PI of an annuity that pays $500 per year for eight years and costs $2,500. Assume a discount rate of 6%. Show the calculations.

Q: An annuity pays an amount of $86.00 each period for 9 periods, and the present value is $666.00.…

A: An annuity is a series of payments made at equal intervals. Examples of annuities are regular…

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A: Information Provided: Monthly annuity payment = $400 Table factor (Ordinary Annuity) = 21.67568…

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A: Calculate the interest rate as follows:MS-Excel --> Formulas --> Financials --> Rate

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A: Annuity means continuous payments at regular intervals. Interest is given on annuity or such deposit…

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A: An annuity refers to a series of periodic payments that are made in exchange for a lump sum payment.…

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Q: Solve by using formulas. (Round your answer to the nearest ce Present value (in $) of an annuity due…

A: Solution- Period Principle amount PV @ 5.7% Present value 1 1200 .94607 1135.284 2 1200…

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A: An ordinary annuity is a series of fixed payments received or paid at a fixed interval for a defined…

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A: Annuities - Annuities are the agreements and contracts that promise periodic and regular payments or…

Q: Consider a perpetuity that pays 100 at the end of each year for the first 10 years and 50 at the end…

A: Perpetuity is series of cash flows which happens at a periodic interval till perpetuity

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A: The Future Value of Annuity represents the total value of a series of equal payments or cash flows…

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A: Discounted value is the present value of the annuity for the years. Annuity payments are discounted…

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A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Annuity Future Value Inputs Payment 80 Discount Rate/Period 6.00% Number of Periods 5 Annuity Future…

A: Future value of annuity is the future value of all the stream of cash flow.   Future value of…

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A: Annuity paymentsAnnual ratesInterest compoundedPeriod invested1$3,700.007.00%Semi-annually9…

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A: Macaulay Duration is a weighted average of the maturities of all the income streams of a bond or a…

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A: Following is the answer to the question

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Q: You purchase a $10, 000 annuity with payments at the end of each year for 30 years and an effective…

A: Present value of annuity = $10000 Interest rate (r) = 4% Annuity amount (A) = $500 Additional amount…

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A: Using Excel function: =PV(rate,nper,pmt,fv,type)Option 1) =PV(9%/2,3*2,-5600)= 28,884.09Rate= 9%/2 =…

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A: Answer. Option D. 13%   Working PV of Annuity A = [300 / (1+i)^1]+[300 / (1+i)^2]+[300 /…

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A: Given: Monthly payment (m) is $100 Annual rate (r) is 8% For 11 years

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A: Monthly deposit (D) = $50 Monthly interest rate (r) = 0.00416666666666667 (i.e. 0.05 / 12) Monthly…

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A: Present value of annuity is the current value of the future payment.   it can be calculated by…

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A: Total Periods(n) = 11 Rate(r) = 5.3% Present Value (PV) = $ 510.00 As per Formula,       Present…

Q: Samuel wants to make regular annual payments of size P dollars into an annuity that pays interest…

A: Given : Samuel wants to make regular annual payments of size P dollars into an annuity that pays the…

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.