The BBB Corporation, a small plastic toy manufacturer, wants to determine the present value of an ordinary annuity. The annuity consists of cash flows of $ 700 at the end of each year for 5 years. The business requires the annuity to provide a minimum return of 8%.
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A: An annuity is a contract between you and an insurance company in which you pay a lump-sum payment or…
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A: Annuities are financial products that are sold by the financial institutions (like insurance…
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A: Future value of annuity = P * [ (1+r)^n - 1 ] /r Where P = Annuity amount i.e. $5000 r = rate of…
Q: Janice and Terry Van Dyke have decided to establish a quarterly ordinary annuity of $8,000 for the…
A: Ordinary annuity refers to the periodic series of payments that an investor makes into an investment…
Q: To find the value of an annuity due, you will multiply the value of the ordinary annuity by…
A: Present value is the current worth of the future payments that are to be received. As per time value…
Q: Which of the following transactions would best use the present value of an annuity due of 1 table?
A: The present value of an annuity due is used to derive the current value of a series of cash payments…
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A: Introduction: Future Value of Annuity Due: Future value: The value of an investment made today, with…
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A: The term "annuity" refers to insurance policies sold by financial organisations with the goal of…
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Q: Jami Minard wants to receive an annuity of $5,000 at the beginning of each year for the next 10…
A: Periodic Payment = $5,000 Time Period = 10 years Interest rate = 7%
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A: Future value required (FV) = $81000 Interest rate = 16% Quarterly interest rate (r) = 16%/4 = 4%…
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A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…
Q: Recently, More Money 4U offered an annuity that pays 6.9% compounded monthly. If $1,060 is deposited…
A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…
Q: Suppose you find an annuity that pays 8% annual interest, compounded annually. If you invest in this…
A: Annuity refers to the amount of installment that is paid regularly in a specific time gap and for a…
Q: Suppose an annuity will pay $14,000 at the beginning of each year for the next 5 years. How much…
A: Annual payment (P) = $14,000 Interest rate (r) = 6.5% Period (n) = 5 Years
Q: Recently, More Money 4U offered an annuity that pays 6.3% compounded monthly. If $1,256 is deposited…
A: An annuity is an agreement or a contract between two parties in which one party promises to make…
Q: Recently, More Money 4U offered an annuity that pays 5.7%compounded monthly. If$1,402 is deposited…
A: MONTHLY COMPOUNDING RATE (5.7%) 0.4750% PERIOD (11*12) 132 PMT (MONTHLY DEPOSIT) 1402…
Q: Use the formula for the value of an annuity to solve:To offer scholarship funds to children of…
A: The future value of the annuity is the future worth of a cash flow series at a certain rate of…
Q: An investor requires an annual (year-end) income of $15,000 in perpetuity. Assuming a fixed rate of…
A: Information Provided: Yearly annual income = $15,000 Interest rate = 4% NOTE: As per our…
Q: An investor requires an annual (year-end) income of $15,000 in perpetuity. Assuming a fixed rate of…
A: Information Provided: Annual income = $15,000 Interest rate = 4% NOTE: As per our policy, we…
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Q: esent amount of 10201 is invested into an account, which can be withdrawn after the end of 30 years.…
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A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
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Q: If P8,000 is deposited in the bank each year for 10 years, how much annuity can aperson get annually…
A: Future value = p/r * ((1+r)n - 1) P = 8000 r = 12% N = 10 Future value = 140,389.88
Q: In the following ordinary annuity, the interest is compounded with each payment, and the payment is…
A: It can be solved using NPER function in excel. =NPER(rate,pmt,pv,[fv],[type]) Rate The interest…
Q: Acme Annuities recently offered an annuity that pays 3.6% compounded monthly. What equal monthly…
A: Each period payment is considered as PMT.
Q: The student who wins the Fancy Est Sunglasses Contest will receive a cash prize each year. The…
A: In this perpetuity value is to be find out. Perpetuity is basically a value which accounts for…
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A: Computation:
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Q: A company wants to have $30,000 at the beginning of each 6-month period for the next 4 1/2 years. If…
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Q: Suppose a friend tells you about an annuity that pays 6% annual interest, compounded semi-annually.…
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A: Perpetual annuity is a concept of infinite payment of cash flow series. Here the total amount of…
Q: A small business has determined that the machinery they currently use will wear out in 17 years. To…
A: The question is based on the concept of Financial Management.
Q: how much is in the account after 12 years? How much of this is interest?
A: When equal payments are made at equal time intervals, it is called annuity. Payments like monthly…
Q: Recently, More Money 4U offered an annuity that pays 5.4 % compounded monthly. If $1,634 is…
A: Computation of future value and interest earned:
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A: In this question, if the amount is deposit at the beginning of the year then the period we will use…
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- County Ranch Insurance Company wants to offer a guaranteed annuity in units of $500, payable at the end of each year for 25 years. The company has a strong investment record and can consistently earn 7% on its investments after taxes. If the company wants to make 1% on this contract, what price should it set on it? Use 6% as the discount rate. Assume that it is an ordinary annuity and that the price is the same as the present value.A company wants to have $20,000 at the beginning of each six month period for the next 4 1/2 years. If an annuity is set up for this purpose, how much must be invested now if the annuity earns 6.04%, compounded semi annually? (a)Decide whether the problem relates to an ordinary annuity or an annuity due. (B)Solve the problem. (round your answer to the nearest sent)It is estimated that you will pay about $80,000 into the Social Security system (FICA) over your 40-year work span. For simplicity, assume this is an annuity of $2,000 per year, starting with your 26th birthday and continuing through your 65th birthday. Solve, a. What is the future equivalent worth of your Social Security savings when you retire at age 65 if the government’s interest rate is 6% per year? b. What annual withdrawal can you make if you expect to live 20 years in retirement? Let i= 6% per year.
- Leberland Corporation deposits $100,000 every year in a savings account (beginning at the end of the current year) for the next eight years so that it can purchase a new piece of machinery at the end of eight years. The interest rate is 5%. How much money will Leberland Corporation have at the end of eight years?Use the future value of an ordinary annuity factor table shown below to derive your answer.Excerpt from future value of an ordinary annuity factor table Periods 3% 4% 5% 6% 1 1.00000 1.00000 1.00000 1.00000 2 2.03000 2.04000 2.05000 2.06000 3 3.09090 3.12160 3.15250 3.18360 4 4.18363 4.24646 4.31013 4.37462 5 5.30914 5.41632 5.52563 5.63709 6 6.46841 6.63298 6.80191 6.97532 7 7.66246 7.89829 8.14201 8.39384 8 8.89234 9.21423 9.54911 9.89747 9 10.15911 10.58280 11.02656 11.49132 10 11.46338 12.00611 12.57789 13.18079 Group of answer choices $954,911 $477,456 $431,013 $215,507GQ Corporation hopes to withdraw 59,000 at the end of each year for six years from a fund that earns 7% interest. How much should the corporation invest today? Draw a timeline to illustrate the problem. Interest is compounded annually. (Click the icon to view the Future Value of $1 table.) (Click the icon to view the Future Value of an Ordinary Annuity table.) (Click the icon to view the Future Value of an Annuity Due table.) Caro today (Click the icon to view the Present Value of $1 table.) (Click the icon to view the Present Value of an Ordinary Annuity table) (Click the icon to view the Present Value of an Annuity Due table) How much should the corporation invest today? (Use the present value and future value tables, a financial calculator, a spreadsheet or the formula method for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, XXXXXXX Round your final answer to the nearest cent. SXXX) The…Compare the two giveņ annuity situations below. What conclusion can you draw from the information, without finding the final balance. Annuity A: Depositing $100 per month in an account earning 6% annually, and making these deposits for 40 years. Annuity B: Depositing $150 per month in an account earning 3% annually, and making these deposits for 25 years.
- 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.)Customers buy this product on their 65th birthday when they retire. The annuity will make 20 annual payments of $80,000. The first annual payment of $80,000 will occur on the customer’s 68th birthday (customers typically rely on their personal savings to travel for the first few years). For this product, Wagon Financial can invest the customers’ money at 12% per annum effective.1. What price should Wagon Financial charge for this product?A small business has determined that the machinery they currently use will wear out in 17 years. To replace the new machine when it wears out, the company wants to establish a savings account today. If the interest rate on the account is 1.1 percent per quarter and the cost of the machinery will be $255,000, how much will the company have to deposit today?
- . An investor requires an annual (year-end) income of $15,000 in perpetuity. Assuming a fixed rate of interest of 4% each year, and ignoring administrative charges, what is the sum required now to purchase the annuity? Give your answer to the nearest $. 2. A saver invests $1,500 now and at the end of each of the next 4 years. If the interest rate is 6%, what is the present value (to 2 decimal places) of this investment? (Use tables)Sebastopol Movie Theater will need $170,000 in 4 years to replace the seats. What deposit should be made today in an account that pays 0.6% compounded semiannually? (a) State the type. sinking fundordinary annuity present valueamortizationpresent value of an annuity (b) Answer the question. (Round your answer to the nearest cent.)Use the formula for the value of an annuity to solve:To offer scholarship funds to children of employees, a company invests $15,000 at the end of every three months in an annuity that pays 9% compounded quarterly. a. How much will the company have in scholarship funds at the end of ten years? b. Find the interest.Round answers to the nearest dollar.
