Starting on December 31st, 2020 (end of the year), Bob will make 8 withdrawals of $12,000....

 

   

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Starting on December 31st, 2020 (end of the year), Bob will make 8 withdrawals of $12,000. What is the cost of the annuity on January 1, 2020 assuming an interest rate of 6%? Round to the nearest whole dollar if needed. Tobin Construction is considering purchasing some new equipment for the company. Due to the expense involved, the equipment company is giving Tobin Construction the option of choosing among three different payment plans and the interest rate is 10%.. 1. $500,000 due immediately in cash 2. $150,000 down payment now; $60,000 per year for 9 years beginning at the end of the current year. 3. $65,000 due immediately and at the beginning of each of the next 12 years. What is the Present Value of option 1? Starting on December 31st, 2020 (end of the year), Bob will make 8 withdrawals of $12,000. What is the cost of the annuity on January 1, 2020 assuming an interest rate of 6%? Round to the nearest whole dollar if needed. Tobin Construction is considering purchasing some new equipment for the company. Due to the expense involved, the equipment company is giving Tobin Construction the option of choosing among three different payment plans and the interest rate is 10%.. 1. $500,000 due immediately in cash 2. $150,000 down payment now; $60,000 per year for 9 years beginning at the end of the current year. 3. $65,000 due immediately and at the beginning of each of the next 12 years. What is the Present Value of option 1?

Answer rating: 100% (QA)

SOLUTION To calculate the cost of the annuity we can use the present value of an annuity formula PV PMT 1 1 rn r Where PV is the present value of the ... View the full answer