5. Present value of annuities and annuity payments The present value of an annuity is the sum of the discounted value of all future cash flows. You have the opportunity to invest in several annuities. Which of the following 10-year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate. An annuity that pays $500 at the end of every six months   An annuity that pays $1,000 at the beginning of each year   An annuity that pays $1,000 at the end of each year   An annuity that pays $500 at the beginning of every six months     You bought an annuity selling at $17,390.08 today that promises to make equal payments at the beginning of each year for the next eight years (N). If the annuity’s appropriate interest rate (I) remains at 5.00% during this time, then the value of the annual annuity payment (PMT) is    .   You just won the lottery. Congratulations! The jackpot is $60,000,000, paid in eight equal annual payments. The first payment on the lottery jackpot will be made today. In present value terms, you really won    —assuming annual interest rate of 5.00%.

Q: A. An ordinary annuity selling at $2,514.15 today promises to make equal payments at the end of each…

A: In ordinary annuity, payment occurs at the end of the every period. Value of annuity is the present…

Q: Suppose you are going to receive $13,500 per year for five years. The interest rate is 8.4% a. What…

A: PV of Ordinary Annuity = 13500*a<5> = 13500*(1-(1+i)^-5)/i = 13500*(1-1.084^-5)/0.084 =…

Q: Your insurance company offered you an annuity that pays you $100 at the end of each year. The life…

A: GIVEN, A= $100 N=10  R=8%

Q: What is the present value of the payments if they are in the form of an ordinary annuity? What is…

A: The present value can be calculated as follows : Calculations for above :

Q: (a) Suppose you wish to borrow $60,000 at an annually compounded interest rate of 16% for a period…

A: 1. A loan is the money is given to another party in exchange for repayment of the loan principal…

Q: What is the future value four years from now of each of the following cash-flow streams if money can…

A: Future value is the worth of a certain deposit made today at a specific time in future.

Q: Annuity:  3.  Suppose you invested $1000 per quarter over a 2-year period. If money earns an annual…

A: GIVEN: Invested $1000 per quarter  total no. of quarter in a year is 4  amount invested for 2 year…

Q: 5. Suppose you have an opportunity to buy an annuity that pays $3,500 at the end of each year for 6…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 5. Suppose an annuity at 4% compounded semi-annually will pay $4000 at the end of each 6-month…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: 6. Given a nominal rate of 15% čómpounde for 12 years in an ordinary annuity. Determine the…

A: The factor is calculated using the required rate of return and for the given period. The factor is…

Q: 1. A five-year ordinary annuity has a present value of $1,000 and the interest rate is 10 percent of…

A: The formula for the calculation of PV of ordinary annuity is as follows: PV of…

Q: You are considering investing in a security that will pay you $1000 in 30 years. If the appropriate…

A: Excel Spreadsheet:

Q: The present value of an annuity is the sum of the discounted value of all future cash flows. You…

A: Given: Particulars Amount Amount Amount Amount Years (NPER) 10 10 10 10 Interest…

Q: An investment pays simple interest, and quadruples in 10 years. What is the interest rate?

A: Time Period = 10 Years

Q: 3. An investment pays as shown in the cash flow diagram below. $60,000 $40,000 $35,000 $20,000 2 8…

A: Given: Interest rate "r" = 3% compounded monthly Hence, effective annual interest rate will be:…

Q: To find the present value of a sum of sh. 10,000 to be received at the end of each year for the next…

A: The present value (PV) is the value of today's payment that is promised to be made in the future.…

Q: An annuity pays $145.00 each period for 10 periods. For these cash flows, the appropriate discount…

A: Using Future value function in Excel

Q: 1. If you receive $29 each quarter for 19 years and the discount rate is 0.05, what is the present…

A: In this Question we are required to compute the Present Value of Cash flows received every quarter…

Q: What is the present value of a perpetual stream of cash flows that pays ​$   7,500 at the end of…

A: Year one cash flow = $7500 Growth rate = 0.02 Discount rate = 0.09 Discount rate = 0.07     Present…

Q: the future value of an ordinary annuity

A: 1. FV of Ordinary Annuity​=C×(1+i)n−1​/i where: C=Cashflow per period i= interest rate n= number…

Q: What is the present value of a growing perpetuity that has an initial payment of $20,000 one year…

A: Present value of growing perpetuity = Value one year from now / (Required return - growth rate)

Q: An annuity pays $145.00 each period for 10 periods. For these cash flows, the appropriate discount…

A: Future value annuity = annuity * PVAF(rate,period)

Q: What is the present value of a perpetual stream of cash flows that pays ​$3,500 at the end of year…

A: Cash flow =$3500 Annual growth rate is 4% To Find:- Present value of a growing​ perpetuity if…

Q: An annual growing perpetuity has a present value of $363,636.36  What is the growth rate (g) of this…

A: The time value of money is considered for determining the cash flows compounded and discounted…

Q: 5. Consider an annuity where you receive $1,000 payments at the end of each year for the next 20…

A: The present value is the present worth of the amount that will be paid or received at future.

Q: Suppose you save $500 per year at the end of each year for 15 years and earn 8.25% interest per…

A: When a payment is made repeatedly at regular time intervals it is referred to as Annuity. Present…

Q: Calculate the present values at t = 0 (now) of the following cash flows: j. The first cash flow at…

A: The present value is the method of finding out the profitability of the project by adding up…

Q: 1. An ordinary annuity has cash flows at the end of each period. True or False 2. Compounding…

A: Annuities refer to financial products which offer a guaranteed income for retirees and are…

Q: Step 1 The present value of an annuity is the amount needed now so that desired annuity payments may…

A: Compound interest (also known as compounding interest) is the interest on a loan or deposit that is…

Q: A. You have the opportunity to invest in several annuities. Which of the following 10-year annuities…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: What is the future value of the initial $10,000 deposit after 5 years? We assume current interest…

A: Future value of the initial $10,000 deposit after 5 years can be calculated using future value…

Q: Suppose you are going to receive $13,000 per year for 7 years. The appropriate interest rate is 8…

A: Present value of annuity is the present value of all the stream of cash flows that occur in future.…

Q: What is the present value of a perpetual stream of cash flows that pays   $70,000 at the end of…

A: Year one cash flow = $70,000 Discount rate = 0.11 Growth rate = 0.05   Present value is the current…

Q: 6. You are contemplating the purchase of a twenty-four year (variable) annuity that promises cash…

A: Compounded Monthly Number of compounding periods = 12 APR = 14.4%

Q: 4. If you receive $116 each month for 28 years and the discount rate is 0.08, what is the present…

A: This Question require to calculate the Present Value of Cash flows received every month for 28…

Q: If you deposit money today in an account that pays 6.5% annual interest, how long will it take to…

A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…

Q: What is the future value of an ordinary annuity that promises $60,000 per year for 10 years if the…

A: Given: PMT = Payment = $60,000 NPER = Number of years = 10 Interest rate = 4%