What is the present value of a $5,500 annuity payment over 5 years if interest rates...
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What is the present value of a $5,500 annuity payment over 5 years if interest rates are 5.5 percent? Suppose that you place $5,000 in a bank account each year for the next 20 years. How much would be in your bank account at the end of the twentieth year if the deposits earned an annual rate of return of 4% each year? N=20 Repeat above question for annuity due. If you want to accumulate $80,000 and you have $9,000 saved now, how many years will it take if you pay $100 per quarter and your investment account pays 5.5% compounded quarterly? 12. What is the present value of a $350,000 cash flow to be received at the end of each of the next 10 years from an account that earns an annual rate of 4%? 13. Repeat above question for annuity due. 14. What is the future value of an ordinary annuity of $72,000 for 4 years, if interest rates are 6 percent? 15. What is the future value of the same annuity due? 16. What is the present value of a $410,000 cash flow to be received at the beginning of each of the next 15 years from an account that earns an annual rate of 9%? What is the present value of a $5,500 annuity payment over 5 years if interest rates are 5.5 percent? Suppose that you place $5,000 in a bank account each year for the next 20 years. How much would be in your bank account at the end of the twentieth year if the deposits earned an annual rate of return of 4% each year? N=20 Repeat above question for annuity due. If you want to accumulate $80,000 and you have $9,000 saved now, how many years will it take if you pay $100 per quarter and your investment account pays 5.5% compounded quarterly? 12. What is the present value of a $350,000 cash flow to be received at the end of each of the next 10 years from an account that earns an annual rate of 4%? 13. Repeat above question for annuity due. 14. What is the future value of an ordinary annuity of $72,000 for 4 years, if interest rates are 6 percent? 15. What is the future value of the same annuity due? 16. What is the present value of a $410,000 cash flow to be received at the beginning of each of the next 15 years from an account that earns an annual rate of 9%?
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To calculate the present value future value and future value of annuities we can use the formulas for present value PV future value FV and annuity pay... View the full answer
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Posted Date:
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