Next year, you will begin receiving $173 per year in perpetuity from a family trust fund (first payment is exactly 1 year from today). You have decided to discount these cash flows at a constant interest rate of 5.8%. What is the present value today of these future cash flows?

Q: Assume that investing $500 in a fund today will give you a return of $530 a year later. On the other…

A: See the explanation belowExplanation:No, based on the information provided, choosing the bank's…

Q: Find the present value of a perpetuity that pays $2,000 per year and the interest rate is 10%.

A: We are given following details : Annual cash flow in perpetuity = $2000 Interest rate = 10% We need…

Q: Consider an investment which pays $2,000 at the end of year 1, year 2, and year 3. In year 4, the…

A: Terminal value at end of year 3 = Cash flow in year 4  / (Interest rate - growth rate) = $5000 / (7%…

Q: You are expecting to receive the following payments: $7,000 in one year and $5,000 three years from…

A: Payment for Year 1 = p1 = $7000Payment for year 3 = p3 = $5000Discount Rate = r = 8%

Q: You have been offered the opportunity to invest in a project that will pay$3,509per year at the end…

A: Formula to calculate Future Value of this cash flows patter is as follows:  FV = C1*(1+r)4 +…

Q: Calculate to present value of t

A: Time value of money (TVM) means that the amount of money received in the present period will have…

Q: A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and…

A: Variables in the question:Annual payment (P)=$1000Growth (g)=8%Interest rate(r)=11%

Q: Name: Course: Subject: Date: Use the net present value calculator in presenting the cash flow.…

A: The present value of the cash flows is the value at the present time with the help of a certain rate…

Q: You estimate that the little drive-through coffee kiosk you own will generate ordinary annuity…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: Find the present value of this cash flow stream.                                 2. Find the future…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Starting in year 3 you will receive 5 yearly payments on January 1 for P50,000. You want to know the…

A: Net Present Value (NPV) is a capital budgeting technique which uses a discount rate to bring all the…

Q: If your trust fund promises to pay you RM25,000 on your 24th birthday (6 years from today) and earns…

A: Promised amount (F) = RM 25000 n = 6 years r = 9%

Q: A perpetuity with a present value of $25,000 today yields cash flows of $100 per month. The first…

A: Perpetuity involves receiving cash flow for an infinite period of time. Perpetuity calculation can…

Q: After carefully exmaining your budget, you determine you can manage to set aside $350 per year. You…

A: Introduction: Future Value of Annuity Due: Future value: The value of an investment made today, with…

Q: Suppose that starting one year from now you will receive $560 a year at the end of every year. If…

A: Present value of perpetuity = perpetuity amount / discount rate

Q: If you invest $8,300 per period for the following number of periods, how much would you have…

A: Future value, which is dependent on the assumption of compound interest or investment growth, is the…

Q: You are given $200 each year starting next year and finishing in 15 years (t = 15). If the discount…

A: We need to use present value of annuity due formula to calculate present value of cash flows stream.…

Q: Jami Minard wants to receive an annuity of $8,000 at the beginning of each year for the next 10…

A: Annuity refers to a contract between an individual and an insurance company under which a desired…

Q: A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and…

A: We will use the concept of the time value of money here. As per the concept of the time value of…

Q: What is the present value of your end-of-year investment of $1,000 per year, with the first cash…

A: According to the time value concept, the purchasing power of a sum of money today is more than the…

Q: An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you…

A: Time value of money is a concept that deals with calculating the actual worth of money at present…

Q: A perpetuity with a present value of $60,000 today yields cash flows of $1,200 per quarter. The…

A: Solution: An equal amount received for a perpetual period, is called perpetuity.  So, present value…

Q: (Future value of an annuity and annuity​ payments) You are trying to plan for retirement in 12…

A: Saving Account   $       2,10,000 Stocks  $       3,50,000 Annual deposit in saving…

Q: You are expecting to receive a payment of $5969 in 2 years and $9869 in 6 years. If the interest…

A: One of the useful concept used in finance is time value of money. It says that a dollar amount…

Q: To calculate the value today of receiving $1,000 each year for the next 10 years, you would use…

A: The present value computation establishes the current value of a future payment stream. An annuity…

Q: (RR calculation) Your investment advisor has offered you an investment that will provide you with a…

A: The IRR of an investment refers to the measure of the profitability of the investment calculated by…

Q: Assume you recently have 6,000 in a bank. Asusume that you are going to receive 160 monthly until…

A: It is calculated by discounting all the cash flows to be received in the future and taking the sum…

Q: You plan on saving $15,200 this year, nothing next year, and $17,500 the three years after that. You…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: ou will receive $100 one year from today and another $100 two years from today. The interest rate…

A: Present Value is a current price of the future value at specified rate of interest which amount will…

Q: You will receive a cash flow 8 years from now and at the end of every year after that in perpetuity.…

A:

Q: You have just received a windfall from an investment you made in a friend’s business. You will…

A: a) Present value = Future value / (1 + Rate)^Time Present value = $14,050/1.06 + $3,250/1.06^2 +…

Q: Suppose you want to make an investment of $5,000, and you have two funds to choose from: Fund A and…

A: Future inflow refers to how much an investor is likely to receive as money from an investment.…

Q: What is the present value of the following cash flows if the discount rate is at 5%? You receive 100…

A: Discount Rate = r = 5%Cash Flow for year 0 = cf0 = $100Cash Flow for year 1 = cf1 = $200Cash Flow…

Q: You are told you will receive a cash flow stream that gives you $2,150 at time 1, $2,750 at time 3,…

A: Present value today is equivalent money that is to be received in the future times at different…

Q: An investment will pay $500 two years from now, $841 four years from now, and $1,166 five years from…

A: Organizations may analyze and manage risk by knowing the future value of assets or financial…

Q: A perpetuity with a present value of $80,000 today yields cash flows of $2,500 per quarter. The…

A: For an unlimited amount of time, the stream of cash flows that continues is known as perpetuity. A…

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.