You are considering an investment in a 40-year security. The security will pay $25 a year at the end of each of the first three years. The security will then pay $30 a year at the end of each of the next 20 years. The nominal interest rate is assumed to be 8%, and the current price (present value) of the security is $360.39. Given this information, what is the equal annual payment to be received from Year 24 through Year 40 (for 17 years)?

Suppose you want to purchase a property for $205,000 and you have $30,000 to put down as a down payment. The property has an existing mortgage that can be wrapped. This loan is a fixed-rate mortgage at 7 percent, monthly payments. This loan had an original balance of $150,000 and has 20 years remaining on its original 30-year term. The current market rate for a new fixed-rate loan is 10.50 percent for 20 years. The seller will give you a wrap loan for an amount equal to the purchase price minus the down payment at 8.75 percent, monthly payments. What is the effective equity yield for the wrap lender if the wrap loan is written for a term equal to the remaining term of the existing mortgage and both are held to maturity?

A 20-year annuity of forty $7,000 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now. a. If the discount rate is 11 percent compounded monthly, what is the value of this annuity 4 years from now? b. What is the current value of the annuity?

A royalty contract promises a $500,000 sign-up bonus; ten annual royalty payments, starting with $250,000, next year then growing at a rate of 6.5%; and a final bonus (in year ten, together with the last regular payment) of $800,000. If the appropriate discount rate is 10.8%, what is the value of all the payments if this royalty contract is signed today? Use the annuity formula in some of your calculations!

A security pays $800 every 8 years forever. The appropriate discount rate is 2% (EAR). What is the value of the security if the first payment occurs 5 years from now?

An investment offers $966 per year for 11 years, with the first payment occurring Zyears from now. If the required return is 9 percent, what is the value of the investment? (HINT: Remember that when you calculate the PV of the annuity, the claculator gives you the present value of the annuity 1 period before the annuity starts. So if the annuity starts in year 7, that calculator will to give you the persent value of annuity in year 6. Now you have to bring this number to period O by inputting: N=6 (1 period before the annuity starts, in your case it would be a different number depending when your annuity starts) R=9 FV=Present value of annuity you found in step 1. And you solve for PV)

My pension plan will pay me $10,500 once a year for a 10-year period. The first payment will come in exactly five years. The pension fund wants to immunize its position. Required: a. What is the duration of its obligation to me? The current interest rate is 5.0% per year. b. If the plan uses 5-year and 20-year zero-coupon bonds to construct the immunized position, how much money ought to be placed in each bond? c. What will be the face value of the holdings in each zero? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the duration of its obligation to me? The current interest rate is 5% per year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Duration years

Consider a future value of $2,000, 8 years in the future. Assume that the nominal interest rate is 18.00%. Assume that there is semiannual compounding. Entering PMT=0 and a FV=$2,000 into a financial calculator, along with the appropriate periodic interest rate and value of N, yields a present value of approximately $ with semiannual compounding. Assume that there is quarterly compounding. Entering PMT=0 and a FV=$2,000 into a financial calculator, along with the appropriate periodic interest rate and value of N, yields a present value of approximately $ with quarterly compounding. Suppose now that the cash flow of $2,000 occurs only 1 year in the future. Assume that there is monthly compounding. Entering PMT=0 and a FV=$2,000 into a financial calculator, along with the appropriate periodic interest rate and value of N, yields a present value of approximately $ with monthly compounding.

An annuity pays a fixed amount per year and earns a guaranteed annual return of 9 percent. It will provide 20 payments of $30,000 per year. The first payment is set to begin in 30 years. The maximum you are willing to pay for this annuity today is $ (to the nearest dollar).

Currently, you have $10,000 in your retirement account. You deposit $20,000 at the end of each year in the same retirement portfolio for 40 years. You intend to retire 40 years from today. You intend to start receiving monthly payments over the next 30 years after you retire. The first payment would be received at the end of the first month after you retire. What will be your monthly pretax payments if the portfolio is expected to provide 10% annual rate of return? Assume the entire balance is exhausted at the end of the 30th year. O $340,406 O $148,237 O $167,379 O $81,653 O $73,710