You have a chance to buy an annuity that pays Php2,500 at the end of each year for 3 years. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?

Q: You are planning to deposit $4,200 into a financial investment that will pay annual interest rate of…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: You are going to receive $50 at the end of each year for the next 6 years. If you invest each of…

A: The future value of the annuity is the future worth of a cash flow series at a certain rate of…

Q: You want to have $19, 500 in 6 years for a dream vacation. If you can earn an interest rate of .2…

A: The concept of TVM refers to the interest-earning capacity of money because money earned earlier is…

Q: You have just received a windfall from an investment you made in a​ friend's business. He will be…

A:

Q: You have the option of investing in a friend's mortgage fund, for an anticipa yearly return of 13%…

A: Investment amount = $200,000Yearly returns = 13%Number of years = 5 years

Q: Assume that investing $500 in a fund today will give you a return of $530 a year later. On the other…

A: See the explanation belowExplanation:No, based on the information provided, choosing the bank's…

Q: Your investment advisor wants you to purchase an annuity that will pay you $35,000 per year for 10…

A: An annuity is a series of equal payments. It is a financial instrument that guarantees an income for…

Q: You are scheduled to receive Rs. 360,000 in two years. When you receive it, you will invest it for…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: A bank offers to pay you 6 percent compounded monthly. Franco decide to invest 1 million pesos for…

A: Interest rate = 6% Monthly interest rate (r) = 6%/12 = 0.50% Period = 1 Year Monthly period (n) =…

Q: An investment offers to pay you $8,000 a year for five years. If it costs $28,840, what will be your…

A: YEARS 5 PMT (MONTHLY DEPOSIT) 8000 PRESENT VALUE $28,840 FUTURE VALUE $0

Q: If your trust fund promises to pay you RM25,000 on your 24th birthday (6 years from today) and earns…

A: Promised amount (F) = RM 25000 n = 6 years r = 9%

Q: Nora is thinking of investing an amount of P30,000 for 2 12 years. Find the future value based on…

A: Investment = 30,000 N = 2.5 years

Q: you are to receive $ 16700 from your trust fund in 7.5 years. you negotiate a deal where you can…

A: Future value refers to the value of current asset at some future date affected by interest and…

Q: You have an investment opportunity that promises to pay you $18, 499 in four years. Suppose the…

A: Investment is the key allotment of monetary assets with the purpose of creating wages or…

Q: You plan to invest $13223 into an investment that you hope will earn a return of 10.28%.  You will…

A: Future Value = P * (1+r)^nWhere P = Principal / Present ValueR = Rate of returnN = Number of Period

Q: You invest $3,806.00 at the beginning of every year and your friend invests $3,806.00 at the end of…

A: Future value is the estimation of future cash value which is likely to be received in the future…

Q: ou are offered an annuity that will pay R17,000 per year for 7 years (the first payment will be made…

A: Given: Annuity amount = R17,000 Year = 7 Discount rate = 11%

Q: You are looking to invest in a real-estate property to rent out that will cost $100,000. The…

A: Net present value is the difference between the present value of cash flow and initial investment…

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: To compute the present value, the cash flows are discounted.The formula is: present value = cash…

Q: If the guaran

A: The amount to be paid for the policy can be computed as follows :

Q: An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you…

A: Time value of money is a concept that deals with calculating the actual worth of money at present…

Q: You are planning to save for retirement over the next 30 years. To do this, you will invest $1,500 a…

A: Retirement planning is a method of investing to get returns over no income period. This is an…

Q: Chris offers you an investmet where if ou investment where if you invest $1,000 today, he'll return…

A: The annual rate of return refers to the yield earned on an investment over the course of one year.…

Q: You are planning to save for retirement over the next 30 years. To do this, you will invest K700 a…

A: Time Period30Stock Return 10%Bond Return6%Amount In Stock      K 700.00Amount In Bond   K  300.00

Q: ou are trying to value the following investment opportunity: The investment will cost you $5663…

A: NPV of the perpetuity is determined when there is a constant growth in future cash flow for the…

Q: You have an opportunity to purchase a perpetuity that pays $74 per year. What is the most you should…

A: Perpetuity is a stream of identical cash flows with no end. It is a type of payment that is both…

Q: Assume you recently have 6,000 in a bank. Asusume that you are going to receive 160 monthly until…

A: It is calculated by discounting all the cash flows to be received in the future and taking the sum…

Q: You plan on saving $15,200 this year, nothing next year, and $17,500 the three years after that. You…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: You expect to receive a payout from a trust fund in 3 years. The payout will be for $11,000. You…

A: Receipt in 3 years (I) = $11,000 Interest rate (r) = 0.065 Future value (FV) = $19,000 Period for…

Q: A trust fund will pay you $1000 per month for life once you turn 18. You are currently 11. Interest…

A: Monthly Payment = 1000Interest Rate = 4.95% Compounded QuarterlyNumber of compounding periods =…

Q: You will invest in something that will give you a payment of $211 two times each year.  You plan to…

A: Step 1 An annuity is a contract that you have with an insurance provider that calls for periodic…

Q: You are looking to invest your savings and want to earn a 10% annualized return. You can choose from…

A: The idea of present value, in finance, is to determine the worth of future cash flows or a series of…

Q: If I can invest R120 today and I want to have R500 in my account 4 years from today at what interest…

A: Amount invested Today=120Year-2 , Amount invested=100Year-4, Amount Received =500Time period=4…

Q: ou have the choice of two equally risky annuities, each paying $5,000 per year for 8 years. One is…

A: The concept of time value of money will be applied here. Annuity refers to a fixed periodic sum of…

Q: Suppose that you expect to receive an inheritance of £10,000 in one year. You will want to put this…

A: A Forward Rate Agreement (FRA) is a financial derivative that enables parties to lock in a…

Q: Your rich uncle is offering you a gift that you will accept today. Your uncle wants you to choose…

A: The money's time value concept indicates that any sum is worth more currently as compared to the…

Q: After consulting with your financial advisor, you figured that you need $9,000 per year for your…

A: Value of annuity is the present value of payments from the annuity based on the interest rate and…

Q: You expect to receive $150,000 per year on a contract that will last 5 years. You are trying to…

A: Present value of future cash inflows will be equal to the worth of contract today.   Worth of…

Q: ou are offered an investment that requires you to put up $5,000 today in exchange for $12,000 10…

A: Future value is the compounded value of a sum of money invested for a period of time at a specified…

Q: Assuming an annual rate of return of 9.5% and depositing $3,000 at the end of every 6 months into…

A:

Q: tment will give you monthly payments of $1972.19 for 8 years. You will receive your first payment…

A: Present value is the equivalent value today of the future money that is going to be received in the…

Q: You just inherited some money, and a broker offers to sell you an annuity that pays Php5,000 at the…

A: Time value of money is a financial concept which is used to calculate the value of money in present…

Q: a) Suppose you have $10,000 to invest in a savings account, and you have two investment options…

A: Given Investment amount 10000 rates  5% and $4.5%

Q: You plan to invest $13223 into an investment that you hope will earn a return of 10.28 % . You will…

A: Time value of money concept says that a dollar amount invested today will have more value in future…

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.