You have your choice of two investment accounts. Investment A is a 9-year annuity that features end-of-month $2,800 payments ar has an APR of 7 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an APR of 9 percent, also good for 9 years. How much money would you need to invest in B today for it to be worth as much as Investment A 9 years from now? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present value

You have your choice of two investment accounts. Investment A is a 9-year annuity that features end-of-month $2,800 payments ar has an APR of 7 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an APR of 9 percent, also good for 9 years. How much money would you need to invest in B today for it to be worth as much as Investment A 9 years from now? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present value

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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Find the present value of a 4-year $60 annuity when the stated rate is 6%, compounded monthly. Make sure you use the lump sum approach. Be very specific as to what each step involves. Then, explain how your answer would have changed if you had been told these payments were payments ‘due’ and why. Write full sentences out please in addition to calculations.
Someone needs to make the following annuity payments to an individual: £445 paid at the end of each month during the first 15 years and then £448 paid at the end of each 4 months for the following 8 years. Assuming an effective monthly interest rate of 1.3% throughout the entire period, how much total fund the insurer needs to hold today in order to meet these payments? correct answer = 31470.44, NO TABLES, ONLY FORMULAS, PLEASE
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M5
TABLE 13.2 Present value of an annuity of $1 ½% 8% 1% 0.9901 2% 0.9804 3% 0.9709 4% 0.9615 5% 0.9524 1.8594 6% 7% 0.9434 0.9346 0.9259 9% 10% 11% 12% 0.9174 0.9091 0.9009 0.8929 0.9950 1.9851 1.9704 1.9416 1.9135 1.8861 2.9702 2.9410 2.8839 2.8286 2.7751 2.7232 3.9505 3.9020 3.8077 3.7171 3.6299 3.5459 1.7591 1.7355 1.7125 1.6901 2.5313 2.4869 2.4437 2.4018 3.2397 3.1699 3.1024 3.0373 3.8897 3.7908 3.6959 3.6048 4.4859 4.3553 4.2305 4.1114 4.9259 4.8534 4.7134 4.5797 4.4518 1.8334 1.8080 1.7833 2.6730 2.6243 2.5771 3.4651 3.3872 3.3121 4.1002 3.9927 4.6229 5.2064 5.7466 4.3295 4.2124 5.8964 5.7955 5.6014 5.4172 5.2421 5.0757 4.9173 4.7665 6.8621 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 5.3893 5.0330 4.8684 7.8230 7.6517 7.3255 7.0197 6.7327 6.4632 6.2098 5.9713 8.7791 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 4.7122 4.5638 5.5348 5.3349 5.1461 4.9676 5.9952 5.7590 5.5370 5.3282 6.4177 6.1446 5.8892 5.6502 6.8052 7.1607 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101…
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