What is the present value of a perpetuity that pays $661 every year forever, if the interest rate is to be 2.25% (compounded). Answer to the nearest cent.A Moving to the next question prevents changes to this answer.

Step 1: Given Value for Calculation Annual Payment = p = $661Interest Rate = r = 2.25% Step 2:…

Answered: What is the present value of a…

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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At a discount rate of 6.00%, find the present value of a perpetual payment of $ 1,000 per year. If the discount rate were lowered to 3.00%, half the initial rate, what would be the value of the perpetuity? Question content area bottom Part 1 a. If the discount rate were 6.00%, the present value of the perpetuity is $ enter your response here . (Round to the nearest cent.)
I need the answer as soon as possible
Suppose you just bought an annuity with 12 annual payments of $15,700 at a discount rate of 11.75 percent per year. a. What is the value of the investment at the current interest rate of 11.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What happens to the value of your investment if interest rates suddenly drop to 6.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What happens to the value of your investment if interest rates suddenly rise to 16.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a. Present value at 11.75 percent b. Present value at 6.75 percent $ 124,187.88 153,795.59 c. Present value at 16.75 percent $ 97,472.81
What is the present value of a $800 perpetuity if the interest rate is 8%? If interest rates doubled to 16%, what would its present value be? Round your answers to the nearest cent. Present value at 8%: $______ Present value at 16%: $_____
Your answer is incorrect. Sheridan Company is considering investing in an annuity contract that will return $33,500 annually at the end of each year for 15 years. Click here to view the factor table. What amount should Sheridan Company pay for this investment if it earns an 10% return? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, e.g. 25.25.) Sheridan Company should pay $ eTextbook and Media Save for Later SUPP Attempts: 2 of 3 used Submit Answer
Future Value: Ordinary Annulty versus Annulty Due What is the future value of a 6%, 5-year ordinary annuity that pays $350 each year? Do not round intermediate calculations. Round your answer to the nearest cent. If this were an annuity due, what would its future value be? Do not round intermediate calculations. Round your answer to the nearest cent.
A) suppose be $22,168.70 not sure formula is correct
Consider a perpetuity that pays £500 per year with its first payment at the beginning of t=5. What is its present value today (t=0), given an 8% discount rate? A) £2678.7. B) £2135.6. C) £4593.9. D) £4253.6.
Question 2 What is the future value of a $810 annuity payment over four years if interest rates are 8 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future Value?
For each of the following situations involving annuities, solve for the unknown. Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (i = interest rate, and n = number of years) (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Present Value Annuity Amount i = n = $3,000 75,000 20,000 80,518 1 2 3 4 5 242,980 161,214 500,000 250,000 8% 9% 10% 5 4 8 4

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What is the present value of a perpetuity that pays $661 every year forever, if the interest rate is to be 2.25% (compounded). Answer to the nearest cent. A Moving to the next question prevents changes to this answer.