Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Present value of an
Determine the present value of $200,000 to be received at the end of each of 4 years, using an interest rate of 7%, compounded annually, as follows:
a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar.
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By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar.
Year | Present Value |
---|---|
First year | $fill in the blank 1 |
Second Year | fill in the blank 2 |
Third Year | fill in the blank 3 |
Fourth Year | fill in the blank 4 |
Total present value |
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Follow-up Question
By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar.
Year | Present Value |
---|---|
First year | $fill in the blank 1 |
Second Year | fill in the blank 2 |
Third Year | fill in the blank 3 |
Fourth Year | fill in the blank 4 |
Total present value |
Solution
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- Lepp Complete present value of an ordinary annuity: Note: Round your answer to the nearest cent. Amount of Annuity Expected $ 16,000 Payment Payable Years Quarterly 2 Interest Rate earned 12% Present valuearrow_forwardConstruct an annuity table showing the deposits, interests, and balances for the saving plan below (compulsory to show the working steps to get the interest value): a) $350 is invested in an increasing annuity at the end of every 6 months for 3 years. The account pays 10.25% interest rate compounded semiannually. Period Beginning Interest Deposit Ending balance (Every 6 months) Balance 1 $0.00 $0.00 $350.00 $350.00 3 4 (Copy this table to your answer script)arrow_forwardAmount of annuity expected $900 Payment Annually Time 4 years Interest rate 6% Present value (amount needed now to invest to receive annuity) $3,118.59 Check the correctness of annuity payment by completing the following table. Note: Round the answers the nearest cent. Opening balance ces Interest Annuity Closing balance Year 1 Year 2 Year 3 Year 4 3,118.59arrow_forward
- .arrow_forwardPresent Value of an Annuity Determine the present value of $310,000 to be received at the end of each of four years, using an interest rate of 6%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year $fill in the blank 1 Second Year fill in the blank 2 Third Year fill in the blank 3 Fourth Year fill in the blank 4 Total present value $fill in the blank 5 b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar.$fill in the blank 6 c. Why is the present value of the four $310,000 cash receipts less than the $1,240,000 to be received in the future?The present value is less due to..........................over the 4 years.arrow_forwardNonearrow_forward
- Typed plz and Asap thanksarrow_forwardFind the present value of the following perpetuity. Made At: beginning Perpetuity Payment $380 Payment Period 1 month Interest Rate 9.9% Conversion Period annually Find the present value. Do not approximate the answer. The present value is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)arrow_forwardLoan payment Determine the equal, annual, end-of-year payment required each year over the life of the loan shown in the following table to repay it fully during the stated term of the loan. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Principal $42,000 Interest rate 14% www The amount of the equal, annual, end-of-year payment, CF, is $ Term of loan (years) 20 (Round to the nearest cent.)arrow_forward
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