15A 10-year annuity of twenty $9,000 semiannual payments will begin 11 years fromwith the first payment coming 11.5 years from now.5.88pointsa. If the discount rate is 11 percent compounded monthly, what is the value of thisannuity 7 years from now?SkippedeBookPrinterences68,678.46$106,424.02$ 76,625.86S15,305.94b. What is the current value of the annuity?

Question
Asked Mar 4, 2019
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15
A 10-year annuity of twenty $9,000 semiannual payments will begin 11 years from
with the first payment coming 11.5 years from now.
5.88
points
a. If the discount rate is 11 percent compounded monthly, what is the value of this
annuity 7 years from now?
Skipped
eBook
Print
erences
68,678.46
$106,424.02
$ 76,625.86
S15,305.94
b. What is the current value of the annuity?
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15 A 10-year annuity of twenty $9,000 semiannual payments will begin 11 years from with the first payment coming 11.5 years from now. 5.88 points a. If the discount rate is 11 percent compounded monthly, what is the value of this annuity 7 years from now? Skipped eBook Print erences 68,678.46 $106,424.02 $ 76,625.86 S15,305.94 b. What is the current value of the annuity?

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Expert Answer

Step 1

a. Calculation of Value of Annuity 7 years from now: 

To calculate the value of annuity 7 years from now, it is necessary to calculate the monthly rate, semi-annual rate and present value of annuity 11 years now. The workings are shown below,

Step 2

Calculation of monthly rate

The monthly interest rate of 11% is compounded monthly.

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Step 3

Calculation of semi-annual rate:

The payments are made of semi-annual basis which means two payments ...

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