Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:You want to purchase an annuity on your 30th birthday to provide you
with $15,000 semiannual annuity payments for 20 years when you turn 60-years old. You must
deposit $
APR, compounded semiannually
_into the annuity, rounded to the nearest $100, if the interest rate is 5%
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- You have been offered a 7-year annunity of $2,000 beginning four years from now. If the discount rate is 8%, what is the value of the annuity todayarrow_forwardYou deposit $11,600 annually into a life insurance fund for the next 10 years, at which time you plan to retire. Instead of a lump sum, you wish to receive annuities for the next 20 years. What is the annual payment you expect to receive beginning in year 11 if you assume an interest rate of 8 percent for the whole time period? (Do not round Intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Annuities per year over the next twenty yearsarrow_forwardYou plan to place $1,200 per year into a Roth IRA. You expect to earn 6% APR and you will place this amount into the account for 35 years. How much will you have in the account in 35 years? Round to the nearest $1,000.arrow_forward
- Use the appropriate formula to find how much you should deposit now at 7% interest, compounded annually, to yield an annuity payment of $1,250 at the BEGINNING of each year, for 15 years.arrow_forwardLidia deposits $800 at the END of each year for 8 years in a savings account. The account pays 12% interest, compounded annually. Lidia calculates that the future value of the ordinary annuity is $9839.75. What would be the future value if deposits are made at the BEGINNING of each period rather than the END? the options are: a. 8071.21 b. 9839.75 c. 11020.53 d. 11820.53arrow_forwardYou will receive 100 annual perpetuity starting at year 0, a 300 annual perpetuity with the first payment at the end of year 5, and a 200 semiannual perpetuity with the first payment in the middle of year 10. If you require an effective annual interest rate of 14.49 percent, what is the future value of all three perpetuities together.arrow_forward
- Use the excel and follow the step Like you did last question and please use excelarrow_forwardProvide manual solutions to below mentioned problems. An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate of interest is 4% compounded annually. 1. What is the present value of this annuity at the time he is supposed to receive the first payment?2. What is the sum of this annuity at the end of the 18th year?3. Find the difference between the sum of this annuity which is paid at the beginning of each year and an annuity paid at the end of each year. Answer. 1. P329,141.72 2. P666,780.73 3. P25,645.41arrow_forwardMr. Thompson wants to receive a fixed monthly payment of $800 for 10 years from an ordinary simple annuity. If the annuity offers an annual interest rate of 5%, compounded monthly, calculate the present value of the annuity.arrow_forward
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