Jake is offered to purchase a perpetuity paying R1000 annually. The required rate of return is 15%. At which price would Jake be indifferent to purchasing or not purchasing this annuity? R.
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- Mr. Bearer may choose to take a lump-sum payment of $25,292.8 now from his insurance policy or an annuity of $3,200 annually as long as he lives. How long must Mr. Bearer anticipate living for the annuity to be indifferent to the lump sum if interest rate is 8%? a. 13 years b.15 years c. 11 years d. 9 yearsJoe purchases a£50,30-year annuity. Larry purchases a£50perpetuity. In both cases, payments begin in one year, and the appropriate interest rate is12.5%. What is the present value of Larry's payments that will occur from year 31 onwards?(a) You deposit $135.29 monthly into an account paying 8.75% for 27 years. Find the future value of the annuity. Show your work in detail. (b) If you deposit $140 instead of $135.29 under the same circumstances how much more will your annuity be worth? Show your work in detail.
- Ben and Ren both invest P 100,000 for a period of length t at annual rate of r. Ben’s account earns at an annual simple interest rate r while Ren’s account earns at an annual discount rate r. You are given: •0< r <0.10, and •0< t <10. Show that we are always certain that Ren’s account value is greater than Ben’s account value.Paola purchases a 10 year annuity immediate with an annual effective rate of interest of 7.0718% and annual payments of 10x. Kurt purchases a 10 year decreasing annuity immediate with annual payments and an effective rate of interest of 7.0718%. His first payment is $50 and subsequent payments are reduced by an amount equal to X. Both annuities have the same present value. Calculate X.Calculate the net single premium for a 5 year deferred temporary annuity which pays €2,000 each year, to be received beginning at age 68 for a person who is currently 5O. Assume a rate of interest of 2% and that the premiums are forfeitable.
- Hank made payments of $106 per month at the end of each month for 30 years to purchase a piece of property. He promptly sold it for $99,810. What annual interest rate would he need to earn on an ordinary annuity for a comparable rate of return? ◻️٪ (Round to the nearest hundredth as needed.)A parent on the day the child is born wishes to determine what lump sum would have to be paid into an account bearing interest at 5% compounded annually, in order to withdraw P20,000 each on the child's 18th, 19th, 20th and 21st birthdays. How much is the lump sum amount?Hank made payments of $205 per month at the end of each month for 30 years to purchase a piece of property. He promptly sold it for $175,751. What annual interest rate would he need to earn on an ordinary annuity for a comparable rate of return? (Answer should be a percentage rounded to the nearest hundredth as needed)
- Find the discounted value of an ordinary simple perpetuity paying $2100 at the end of half-year, if interest is i365 = 19.97 %. Answer: 21031.55Amanda purchases a retirement annuity that will pay her $2,500 at the end of every six months for the first nine years and $700 at the end of every month for the next six years. The annuity earns interest at a rate of 4% compounded quarterly. a. What was the purchase price of the annuity? b. How much interest did Amanda receive from the annuity? Not use excelSuppose a friend tells you about an annuity that pays 6% annual interest, compounded semi-annually. You invest in the annuity contributing $10,000 semiannually for 6 years. What is the value of the annuity after your last investment? Enter your answer rounded to the nearest hundred dollars and omit the dollar sign and comma (For example, $42,570.21should be entered as 42600.)