INKING AND CONCEPTS REVIEW 5.1 Annuity Period As you increase the length of time involved, what happens to the present value of an annuity? What happens to the future value? L0 1
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- value of a future payment change as the un to recelpt is lengthened? As the interest rate increases? What's the difference between an ordinary annuity and an annuity due? Why would you prefer to receive an annuity due for $10,000 per year for 10 years than an otherwise similar ordinary annuity? iii.Use a calculator to evaluate the present value of an annuity formula 1- P = m [ ^ - (1 + - - (₁ =) F for the values of the variables m, r, and t (respectively). Assume n = 12. (Round your answer to the nearest cent.) $50; 5%; 4 yr $i need answer typing clear urjent no chatgpt if the future value of an ordinary eight year annuity is $5500 in interest rates are 8.0% what is the future value of the same annuity due? (round your answer to 2 decimal places)
- [2P2] Directions: Determine the kind of annuity used in the following situations. Then, solve the problem. Show complete (Handwritten or typed, not excel) solutions. What equal payments at the beginning of each 2 months for 4 years will discharge a debt of P180,000 due now if the interest rate is 18.48% compounded every 2 months? a. Kind of annuity: b. Computation:Q)You are given the future value of an annuity, A, the monthly payment, R, and the annual interest rate, r. Find the number of monthly payments, n. Round your answer to the nearest whole number if necessary.A = $4000; R = $70; r = 7% Solve it correctly not use excel[2P2] Directions: Determine the kind of annuity used in the following situations. Then, solve the problem. Show complete solutions. What equal payments at the beginning of each 2 months for 4 years will discharge a debt of P180,000 due now if the interest rate is 18.48% compounded every 2 months? a. Kind of annuity: b. Computation:
- 0.03 To calculate the future value of the annuity to the nearest cent, substitute the known values of i = 12 n = 240, and PMT = 120 into the formula and proceed to simplify. (Round your final answer to the nearest cent.) (1 + i)" - 1 FV = PMT| 0.03 240 1 + 12 FV = 0.03 12 Thus, the future value of the monthly deposits of $120 at an annual rate of 3% for 20 years is 2$P=P1,000 r= 5% t= 10 years m=4 What would be the future value of the ordinary annuity of the given data?Annuity Review Problem: You are buying a perpetuity-immediate that makes annual payments X, X + 1, X +2, X, X + 1, X +2, X, X + 1, X2, X,.... The price of the annuity is 40 when priced at (2) = 5%. Find X. A) 0.98 B) 1.00 C) 1.02 D) 1.04 E) 1.06
- [5P2] Directions: Determine the kind of annuity used in the following situations. Then, solve the problem. Show complete solutions. An annuity of quarterly payments of P7,000 starts at the end of 4 years and end of 10 years. Find its present value if the interest rate is 8% compounded quarterly. a. Kind of annuity: b. Computation:0.02 100,000 9.954003994 RI9.954 9941 9.9003994 Hence, the amount of yearly withdrawal is P10,046.21.1 PERIODIC PAYMENT R OF AN ANNUITY: Periodic payment R can also be solved using the formula for amount Future value F or Present Value P of an annuity. mt 1+ F = R R = mt mt P. P R R = 1-(1+) Note: j-= n = mt where R is the regular payment P is the present value of an annuity F is the future value of an annuity j is the interest rate per period n is the number of payments What have I have learned... Complete the sentence below. Write your answers on a separate sheet of paper. 1. is a sequence of payments made at equal (fixed) intervals or periods of time. 2. is the sum of present value of all the payments to be made during the entire term of the annuity. 3. is an annuity where the payment interval is the same as the interest period. 4. is a type of annuity in which the payments are made at the end of each payment interval. is the sum of future values of all payments to be made 5. during…1)[Deferred annuity] You consider purchasing an annuity that pays $2000/yr for 10 years. You are willing to wait until 9 years later to receive the first payment and the interest rate is 10%. How much are you willing to pay for this deferred annuity today? 2)The correct answer is 5,732.97 3)What are the steps to calculate this with a financial calculator?