stK(Related to Checkpoint 6.2) (Present value of an ordinary annuity) Nicki Johnson, a sophomore mechanicalengineering student, receives a call from an insurance agent who believes that Nicki is an older woman who is ready toretire from teaching. He talks to her about several annuities that she could buy that would guarantee her a fixed annualincome. The annuities are as follows:Purchase Price of theAnnuity (At t= 0)Amount of MoneyReceived Per Year$6,500$6,000$9,000AnnuityA$50,000B$40,000C$60,000(Click on the icon in order to copy its contents into a spreadsheet.)EXZEDuration of theAnnuity (Years)161210Nicki could earn 8percent on her money by placing it in a savings account. Alternatively, she could place it in any of theabove annuities. Which annuities in the table above. if anv. will earn Nicki a higher return than investing in the savingsa. If Nicki could earn 8 percent on her money, what is the present value of annuity A with $6,500 payments per year and16 years duration?(Round to the nearest cent.)

Here, AnnuityPurchase price of annuity (PV)Amount of money received per yearDuration of the…

(Related to Checkpoint 6.2) (Present value of an ordinary annuity) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent who believes that Nicki is an older woman who is ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her a fixed annual income. The annuities are as follows: Annuity A B C Purchase Price of the Annuity (Att = 0) Amount of Money Received Per Year $6,500 $6,000 $9,000 $50,000 $40,000 $60,000 (Click on the icon in order to copy its contents into a spreadsheet.) Duration of the Annuity (Years) 16 12 10 Nicki could earn 8percent on her money by placing it in a savings account. Alternatively, she could place it in any of the above annuities. Which annuities in the table above. if anv. will earn Nicki a higher return than investing in the savings a. If Nicki could earn 8 percent on her money, what is the present value of annuity A with $6,500 payments per year and 16 years duration? (Round to the nearest cent.)

(Related to Checkpoint 6.2) (Present value of an ordinary annuity) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent who believes that Nicki is an older woman who is ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her a fixed annual income. The annuities are as follows: Annuity A B C Purchase Price of the Annuity (Att = 0) Amount of Money Received Per Year $6,500 $6,000 $9,000 $50,000 $40,000 $60,000 (Click on the icon in order to copy its contents into a spreadsheet.) Duration of the Annuity (Years) 16 12 10 Nicki could earn 8percent on her money by placing it in a savings account. Alternatively, she could place it in any of the above annuities. Which annuities in the table above. if anv. will earn Nicki a higher return than investing in the savings a. If Nicki could earn 8 percent on her money, what is the present value of annuity A with $6,500 payments per year and 16 years duration? (Round to the nearest cent.)

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter14: Planning For Retirement

Section: Chapter Questions

Problem 8FPE

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(Related to Checkpoint 6.2) (Present value of an ordinary annuity) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent who believes that Nicki is an older woman who is ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her a fixed annual income. The annuities are as follows: Annuity A Purchase Price of the Annuity (Att 0) $40,000 B $60,000 C $60,000 (Click on the icon in order to copy its contents into a spreadsheet.) Amount of Money Received Per Year $6,500 $9,000 $8,000 Duration of the Annuity (Years) 15 18 20 Nicki could earn 11 percent on her money by placing it in a savings account. Alternatively, she could place it in any of the above annuities. Which annuities in the table above, if any, will earn Nicki a higher return than investing in the savings account earning 11 percent? a. If Nicki could earn 11 percent on her money, what is the present value of annuity A with $6,500…
Calculating the present value of an ordinary annuity) (Related to Checkpoint 6.2) Nicki Johnson, a sophomore mechanical engineering student, received a call from an insurance agent who believes that Nicki is an older woman who is ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her a fixed annual income. The annuities are as follows: Annuity Purchase Price of the Annuity Amount of Money Received per Year Duration of the Annuity (years) A $50,000 $8,500 12 B $60,000 $7,000 25 C $70,000 $8,000 20 Nicki could earn 11 percent on her money by placing it in a savings account. Alternatively, she could place it in any of the above annuities. Which annuities in the table above, if any, will earn Nicki a higher return than investing in the savings account earning 11 percent?
(Related to Checkpoint 6.2) (Present value of an ordinary annuity) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an nsurance agent who believes that Nicki is an older woman who is ready to retire from teaching. He talks to her about several annuities that she could buy that would quarantee her a fixed annual income. The annuities are as follows: Purchase Price of the Amount of Money Duration of the Annuity (Years) 18 Annuity Annuity (At t = 0) Received Per Year $6,500 $6,000 A. $40,000 B $40.000 22 BCU IN $50,000 $7.500 16 (Click on the icon D in order to copy its contents into a spreadsheet.) Nicki could earn 12 percent on her money by placing it in a savings account Alternatively, she could place it in any of the above annuities. Which annuities in the table above, if any, will earn Nicki a higher return than investing in the savings account earning 12 percent? GTKY Gen a. If Nicki could earn 12 percent on her money, what is the present value of…
< (Related to Checkpoint 6.2) (Present value of an ordinary annuity) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent who believes that Nicki is an older woman who is ready to retire from teaching He talks to her about several annuities that she could buy that would guarantee her a fixed annual income. The annuities are as follows: Purchase Price of the Annuity (Att = 0) Annuity A B C (Click on the icon in order to copy its contents into a spreadsheet) $40,000 $50,000 $50,000 Amount of Money Received Per Year $6,000 $9,000 $6,500 Duration of the Annuity (Years) 22 12 25 Nicki could earn 11 percent on her money by placing it in a savings account Alternatively, she could place it in any of the above annuities. Which annuities in the table above, if any, will earn Nicki a higher return than investing in the savings account earning 11 percent? a. If Nicki could earn 11 percent on her money, what is the present value of annuity A with $6,000…
2. Annuities - Johan, a sophomore management student, receives a call from an insurance agent who believed that Johan is an older man ready to retire from teaching. He talks to him about several annuities that she would buy that would guarantee her an annual fixed income. The annuities are as follows: Initial Payment into Annuity (at t = 0) Amount of Money Received per Year Duration of Annuity (Years) Annuity 12 $8,500 A $50,000 25 $7,000 В $60,000 20 $8,000 $70,000 If Johan could earn 11 percent on his money by placing it in a savings account, should he place it instead in any of the annuities? Which ones, if any? Why?
Suppose you are in charge of annuities for a life insurance company. A customer comes in and wants to buy an annuity that will pay her a fixed amount each month for the rest of her life. She has $1 million to buy the annuity. Explain how you would determine the monthly payment she would get. How would the monthly payment be affected by a rise in interest rates
5-23. (Solving for Present Value with Annuities) Angus McDonald, a third-year accounting student studying in Scotland, receives a call from an insurance agent, who believes Angus is an older man ready to retire from teaching. He talks to him about several annuities that he could buy that would guarantee him an annual fixed income. The annuities are as follows: INITIAL PAYMENT INTO ANNUITY (AT I = 0) DURATION OF ANNUITY (YEARS) 12 AMOUNT OF MONEY RECEIVED PER YEAR ANNUITY $40,000 $7.500 B $70,000 $8,500 25 C $80,000 $9,500 20 If Angus could earn 12 percent on his money by placing it in a savings account, should he place it instead in any of the annuities? Which ones, if any? Why? 5-24. (Loan amortization) Mr. Dayvos Bay has just purchased a new house for $300,000, He paid $30,000 down payment and agreed to pay the rest over the next 25 years in 25 equal end-of-year payments plus 10 percent compound interest over the unpaid balance. What will these equal payments be? 5-25. (Solving for…
(Solving for r with annuities) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent, who believes that Nicki is an older woman ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her an annual fixed income. The annuities are as follows in the popup window: LOADING... . If Nicki could earn 11 percent on her money by placing it in a savings account, should she place it instead in any of the annuities? Which ones, if any? Why? a. What rate of return could Nicki earn on her money if she place it in annuity A with $7,000 payment per year and 10 years duration? nothing% (Round to two decimal places.) Help Me Solve ThisView an Example Get More Help Clear All Check Answer Data Table ANNUITY INITIAL PAYMENT INTO ANNUITY (AT t = 0) AMOUNT OF MONEY RECEIVED PER YEAR DURATION OF ANNUITY (YEARS) A $40,000…
TERMINAL ACTIVITY PROBLEM SET Read and examine the following real-life applications of deferred annuity. 1. 2. Identify the given quantities and answer the questions that follow. Derek purchased a laptop through the credit cooperative of their company. The cooperative provides an option for a deferred payment. Adrian decided to pay after 4 months of purchase. His monthly payment is computed as P3,500 payable in 12 months. How much is the cash value of the a) What is the interest rate? b) Find the periodic rate. c) What is the deferral period? laptop if the interest rate is 8% convertible monthly? d) How much is the cash price of the laptop? Ambitžon and Passion, Our Mission Partnership Your
Considering the Annuity Formula: In Western countries a client who intend to buy a house apply for an annuity1 housing loan attheir bank. After the pay-out of the debt amount the client pays a constant (annual) amount(interest and repayment of debt) to the bank for e.g. 25 years. The client is owner of thehouse and owes money to the bank, after 25 years (s)he is free of debt and still owns thehouse. Islamic law generally prohibits a charge of interest so that Islamic banks offer the followingIslamic housing “loan contract” (called “Islamic loan”):1. The house is bought by the bank in t = 0 so that she is owner of the house.2. The client pays a periodic rent to the bank for a defined period of 25 years.3. After 25 years the bank donates the house to the client (“for free”) if the rent wasregularly paid (without any outstanding payments). Question 1: Please specify all possible parameters (i.e. variables) on an Islamic loan contract so thatan Islamic bank can calculate the conditions of…
1. Exercise One: Jessica decides to take a $25,000 to help her cover her tuition expenses. The tenor of the loan is 10 years, and the interest rate is 6.75%. Repayments will be made on a monthly frequency. Based on the aforementioned information, and the material covered in class, (a) use the PMT function in Excel to find the fixed total payment, (b) verify your answer from (a) by programming the present value annuity formula as shown in class, (c) create an amortization schedule for this loan, (d) create a bar chart showing the Fixed Total Payment, Interest Paid, and Principal Paid.
A computer chip designer purchased a car for $59,476.47, which includes sales tax and registration. The designer obtains a 5-year loan for the total amount at an annual interest rate of 6.3% compounded monthly. The designer will make monthly payments. The payments calculation for this type of loan uses the formula for the present value of which type of annuity? Given the formula for the payment amount of annuity where PMT is the payment amount in dollars, PV is the present value in dollars, n is the number of payments, and i is the interest rate per period. PMT= ? Determin the following values. PV= $ n= i= What is the designer’s monthly payment? (Round your answer to the nearest cent.)