A retirement benefit has monthly payments for 25 years starting one month after retirement. For the first year, the amount of cach monthly payment is 1800. For esch subsequent year, the monthly payments. are 2% more than the monthly payments from the previous year. Using an annual nominal interest rate of 6%, compounded quarterly, find the present value of this benefit.

Q: You make two annual payments of $2,000 each (the first payment is made one year from today) into a…

A: Number of annual payments (N) = 2 Payment = 2000 Interest rate = 10%

Q: You borrow $280,000 at 4.00% per year and will pay off the loan in equal payments starting one year…

A: Borrowings are the liability that is used to finance the requirement of the funds. The borrwer needs…

Q: Find the present value of the following annuities: 500 payable semi-annually for 10 years if the…

A: Solution:- When an equal amount is paid each period, it is called annuity. Present value of annuity…

Q: A thirty-year annuity has end-of-month payments. The first year the payments are each $120. In…

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

Q: An annuity is paid half-yearly in arrears at a rate of 3000 per annum, for 20 years. The rate of…

A: The Future value of the annuity refers to the sum value of all the payments which is occurred…

Q: An annuity offers a payment of $5000 at the beginning of every three months for twenty years.…

A: An annuity is a lump-sum payment that you will receive each year for the remainder of your life. An…

Q: n annuity pays $4152 per month, and payments are made at the end of each month. If the interest rate…

A: Present value of annuity can calculated by using Excel PV function.

Q: Find the present value of the following annuities: 1. 100 payable every month for 10 years if the…

A: Present value is referred as the current value of future sum of funds or the cash streams that are…

Q: You borrow $5000 at 10% per year and will pay off the loan in 3 equal annual payments starting one…

A: Calculation of Payment at the end of Year 2:The interest payment is $348.94 and principal payment is…

Q: A payment of $500 is made at the end of each month for three years to a savings account. The…

A: Present value method is used to evaluate the different level of investment projects. With the help…

Q: A 15-year annuity pays $1,350 per month, and payments are made at the end of each month. If the…

A: The PV of the annuity is the present worth of the constant amount that has to paid or received in…

Q: The present value of an annuity is 16,950. Quarterly payments of 369 are made from16,950 that is…

A: Present value (PV) = 16950 Quarterly payment (P) = 369 Annual interest rate = 4% Quarterly interest…

Q: If $84,000 is invested in an annuity that earns 5.2%, compounded quarterly, what payments will it…

A: Investment (PV) = $84000 Interest rate = 5.2% Quarterly interest rate (r) = 5.2%/4 = 1.30% Period =…

Q: PNC's 30-year annuity is scheduled to pay off a loan taken out today at a 5% annual effective…

A: given, year (n) = 30 rate = 5% first annuity at t=10, amount= $10,000 then annuity increase by $5000…

Q: Find the future value of an annuity of P5,750 payable at the end of each quarter for 8 years if the…

A: Solution Annuity 5750 Period 8 years Number of annuity period =8*4 =32 Rate of…

Q: An insurance policy provides a benefit of $21,500 twenty two years from now. Alternatively, the…

A: Amount to received after 22 years 21,500 Payment per year is $590

Q: A company wants to have $40,000 at the beginning of each 6-month period for the next 4.5 years. If…

A: The given problem is on Annuity due Annuity due is an annuity whose  payment is due immediately at…

Q: What is the amount of each payment if Plascote Industries borrows $32,600, at  an annual interest of…

A: for calculating amount to be paid for each installment we use PMT function in excel to determine the…

Q: Suppose you borrow $70,000 at 5.25% annual interest to be repaid with a fully amortized plan over 14…

A: Annual payment (P) on a loan (PV) of $70,000 at an interest rate ( r ) of 5.25% and for 14 years (n)…

Q: Find the future value of an annuity of $1500 paid at the end of each year for 10 years, if interest…

A: Calculation of future value of annuity: Answer: Future value of annuity is $20,724.67

Q: An annuity with a cash value of $14,000 earns 5% compounded semi-annually. End-of-period semi-annual…

A: Cash Value = $14,000 Interest Rate = 5% compounded semi annual

Q: The company sells products to a customer for $60,000 and will receive $15,000 at the end of the…

A: Time value of money is the concept that states that the value of money have more worth than the same…

Q: You have taken out a loan that requires you to repay $200 per month for 10 years at 12% annual…

A: Given:

Q: A 15-year annuity pays ¢5,500 per month, and payments are made at the end of each month. If interest…

A: The present value of annuity is the series of cash flows that occur with equal period of time. The…

Q: A 20-year annuity was purchased with $180,000 that had accumulated in an RRSP. The annuity provides…

A: Time Period = 20 Years Interest rate = 5% Present Value = $180,000

Q: Find the present value of the following annuities: 100 payable every month for 5 years if the…

A: Present value (PV) also termed as current value refers to the sum of all future cash flow (CF) or…

Q: An annuity pays $1000 at the end of each year for 4 years and then $2000 at the end of each year for…

A: Required :The discounted value of these cash flows.

Q: Find the final amount in this retirement account, in which the rate of return on the account and the…

A: We can calculate the retirement amount with the help of following formulae:   =FV (RATE, NPER,PMT)…

Q: Monthly payments are to be made against an $850,000 loan at 7.25% compounded annually with a 15-year…

A: Note: As per Bartleby guidelines, only the first 3 subparts can be solved. Please post any other…

Q: A student will receive 3,000 at the beginning of each months for 4 years. What is the sum of this…

A: Annuities are referred to as the contracts that are issued as well as distributed by the financial…

Q: You take out a $7,000 car loan that calls for 60 monthly payments starting after 1 month at an APR…

A: The present value of annuity refers to the current value of regular payments made at fixed intervals…

Q: Suppose you make 1000 pbr monthly deposits to a retirement plan that pays interest at a rate of 30%…

A: Using Excel FV function

Q: What is the present value of $250 annual payments received at the end of each of the next five…

A: Discounting is a technique to compute the present value (PV) of a future amount by using the…

Q: find the final amount in this retirement account, in which the rate of return on the account and the…

A: Interest rate is 7.9% compounded quaterly for first 20 years Interest rate is 6.8% compounded…

Q: A certain annuity pays $108 at the end of every 3 months. If the present value of the annuity is…

A: Annuity means a set of a finite number of payments that are made in equal time intervals and the…

Q: An annuity that pays $950 at the end of each month for 18 years sells for $105,000 What was the…

A: Quarterly Compounded Nominal Interest Rate: Quarterly compounding outperforms semi-annual…

Q: If $87,000 is invested in an annuity that earns 5.6%, compounded quarterly, what payments will it…

A: The interest rate is 5.6%, compounded quarterly. Interest rate per quarter is (5.6% ÷ 4) = 1.4%. The…

Q: If $650 000 is saved for retirement, what rate of interest, compounded monthly, will provide…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: An increasing annuity makes annual payments, and the first payment occurs in 6 months. The annuity…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: A company offer annual payments of $1675 at the end of each year for the next FIVE years. a) What…

A: Annuity is a concept of regular equal payments made at equal interval of time. It is used to…

Q: A 13-year annuity pays $1,400 per month, and payments are made at the end of each month. The…

A: The Present value of annuity can be calculated using PVfunction in excel.It can be divided into 2…

Q: a. You plan to invest $5,000 in an individual retirement arrangement today at a nominal annual…

A: Future value is the value of current asset or investment at a future date. Future value is…

Q: What is the equal payment series for 8 years that is equivalent to a payment series of $15,000 at…

A: Given information:  Payment series: $15,000 Increasing amount: $1,500 Period: 10 years Interest…

Q: A 13-year annuity pays $1,200 per month, and payments are made at the end of each month. The…

A: Present value of annuity is the present value of all the periodic stream of cash flow that occur in…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.