A perpetuity pays 100 on July 1, 2014. Each payment is made on July 1. The amount of each payment is 2.5% more than the payment theprevious year. The modified duration calculated on January 1, 2014 is X.Given an annual effective rate of 5%, calculate X.ABCDE39.540.040.541.041.5

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Answered: A perpetuity pays 100 on July 1, 2014.…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A deferred perpetuity-due begins payments at time n with annual payments of $1,000 per year. If the present value of this perpetuity-due is equal to $6,561 and the effective rate of interest i=1/9, find n. To be computed by hand, not in excel.
A perpetuity-due with annual payments consists often level payments of X followed by a series of increasing payments. Beginning with the eleventh payment, each payment is 1.5% larger than the preceding payment. Using an annual effective interest rate of 5%, the present value of the perpetuity is 45,000. Calculate X. B C 1,679 E 1,696 1,737 D 1,763 1,781
On Ist of November 2005, a man was in receipt of a 250 USD per annum payable monthly on the first day of each month, the final payment being on 1st of August 2024, total amount of the annuity is calculated on the basis of an interest rate of 8% p.a effective Select one: O a. 1,115 USD O b. 734 USD O c. 850 USD O d. 2,460 USD O e. 1,850 USD
Complete the table by filling it with period of deferral and number of payments for each item. Given Period of Defferal Number of Payments 1) Monthly payments of P2500 for 3 years that will start 1 year from now. 2) Semi-annual payments of P10,000 for 10 years that will start 5 years from now. 3) Annual payments of 10,000 for 10 years that will start 2 years from now. 4) Quarterly payment of P9,567.32 for 4 years that will start 1 year from now. 5) Quarterly payments of P3,500 for 3 years that will start 6 months from now.
Compute the nominal rate of intrrest at which $980 deposited at the end of eaach month quaretly for 11 years and 9 months will amount to $34000.00
A perpetuity pays $9600 per half-year, as follows: ㆍin odd-numbered half-year, a payment of $9600 is made at the begin of the half-year. ㆍin even-numbered half-year, a payment of $4800 is made at the end of each quarter. Interest is at annual effective rate of 12.03%. At the begin of an odd-numbered period, this perpetuity is exchanged for another of equal value which provides monthly payments, the first payment due 39 month hence. What is the monthly payment of the new perpetuity ?
A perpetuity-due with annual payments consists of 10 level payments of X followed by a series of increasing payments. Beginning with the 11th payment, each payment is 1.5% larger than the preceding payment. Using an annual effective interest rate of 5%, the present value of the perpetuity is $45,000. Calculate X. a.) 1679 b.) 1737 c.) 1763 d.) 1781
A perpetuity paying $8600 at the end of each half-year is replaced with an annuity paying $X at the end of each month for 46 years. Find X if i, = 5.11 %. Answer: 151.84
A perpetuity pays $9600 per half-year, as follows: • in odd-numbered half-year, a payment of $9600 is made at the begin of the half-year. • in even-numbered half-year, a payment of $4800 is made at the end of each quarter. Interest is at annual effective rate of 12.03 %. At the begin of an odd-numbered period, this perpetuity is exchanged for another of equal value which provides monthly payments, the first payment due 39 month hence. What is the monthly payment of the new perpetuity ? Answer: 260.99
Find the deposit at the end of month needed for 14 years to provide for a perpetuity of $9900 monthly. The 1st perpetuity payment is made at the end 19 month after the last deposit, and interest changes from iz = 17.46 % to iz65 = 9.08 % on that date. Answer: 1610.13
An annual payment of P14 000 is made with interest rate of 10% compounded quarterly for 16 years. 1. Determine the present worth considering annuity due. 2. Compute the difference of the future amounts of the annuity due and ordinary annuity. 3. If the first payment was made at the end of the 10th year, determine the present worth considering ordinary annuity.
You have taken alone of $500000 lone over 12years at 6% intrest rate compounded monthly, which is rembursed with montly payment. What is the principal portion of the 23rd payment. Choose correct alternative from given image

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A perpetuity pays 100 on July 1, 2014. Each payment is made on July 1. The amount of each payment is 2.5% more than the payment the previous year. The modified duration calculated on January 1, 2014 is X. Given an annual effective rate of 5%, calculate X. > B U 39.5 40.0 40.5 D 41.0 41.5