Personal Finance (MindTap Course List)
13th Edition
ISBN: 9781337099752
Author: E. Thomas Garman, Raymond Forgue
Publisher: Cengage Learning
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Question
Chapter 1, Problem 6BYOPFM
a.
Summary Introduction
To calculate: the present value of
Introduction:
b.
Summary Introduction
To calculate: the present value of
Introduction: Time value of money is the concept of finance which calculates the effect of time over the value of money. As per this concept the present value of a future amount is lower than the future value. The present value/ future value of an amount are calculated using the interest rate as discount rate.
c.
Summary Introduction
To calculate: the present value of
Introduction: Time value of money is the concept of finance which calculates the effect of time over the value of money. As per this concept the present value of a future amount is lower than the future value. The present value/ future value of an amount are calculated using the interest rate as discount rate.
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Students have asked these similar questions
Finding the compound sum of $1,000 to be received at the beginning of each of the next 5 years requires calculating the _____.
a. future value of an annuity due
b. future value of an annuity
c. present value of an annuity
d. present value of an annuity due
Future value of an annuity Using the values below, answer the questions that follow. (Click on the icon here in
order to copy the contents of the data table below into a spreadsheet.)
Amount of annuity
$5,000
Interest rate
6%
Deposit period (years)
7
a. Calculate the future value of the annuity, assuming that it is
(1) An ordinary annuity.
(2) An annuity due.
b. Compare your findings in parts a(1) and a(2). All else being identical, which type of annuity-ordinary or annuity
due is preferable as an investment? Explain why.
Present value of an annuity Consider the following case. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.)
Interest rate
Period (years)
7%
14
Amount of annuity
$42,000
a. Calculate the present value of the annuity assuming that it is
(1) An ordinary annuity.
(2) An annuity due.
b. Compare your findings in parts a (1) and a(2). All else being identical, which type of annuity-ordinary or annuity due-is preferable? Explain why.
The present value of the ordinary annuity is $. (Round to the nearest cent.)
(…)
Chapter 1 Solutions
Personal Finance (MindTap Course List)
Ch. 1.1 - Prob. 1CCCh. 1.1 - Prob. 2CCCh. 1.1 - Prob. 3CCCh. 1.1 - Prob. 4CCCh. 1.2 - Prob. 1CCCh. 1.2 - Prob. 2CCCh. 1.2 - Prob. 3CCCh. 1.3 - Prob. 1CCCh. 1.3 - Prob. 2CCCh. 1.3 - Prob. 3CC
Ch. 1.4 - Prob. 1CCCh. 1.4 - Prob. 2CCCh. 1.4 - Prob. 3CCCh. 1.5 - Prob. 1CCCh. 1.5 - Prob. 2CCCh. 1.5 - Prob. 3CCCh. 1.5 - Prob. 4CCCh. 1.6 - Prob. 1CCCh. 1.6 - Prob. 2CCCh. 1.6 - Prob. 3CCCh. 1.6 - Prob. 4CCCh. 1 - Real Income. Joshua Vermier of Sacramento,...Ch. 1 - Prob. 2DTMCh. 1 - Prob. 3DTMCh. 1 - Prob. 4DTMCh. 1 - Using the present and future value tables in...Ch. 1 - Inflation. Laureen Mauers salary a year ago was...Ch. 1 - Prob. 7DTMCh. 1 - Prob. 8DTMCh. 1 - Prob. 9DTMCh. 1 - Prob. 1FPCCh. 1 - Victor and Maria Hernandez Look at Future Income...Ch. 1 - Prob. 3FPCCh. 1 - Prob. 4FPCCh. 1 - Prob. 5FPCCh. 1 - Prob. 1BYOPFMCh. 1 - Prob. 3BYOPFMCh. 1 - Prob. 4BYOPFMCh. 1 - Present Value of a Lump Sum. Complete Worksheet 4:...Ch. 1 - Prob. 6BYOPFM
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