a. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $200,000 for 20 years? Assume that the annuity will earn 12 percent per year. b. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.1 million and the annuity earns a guaranteed annual return of 12 percent. The payments are to begin at the end of the current year. c. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.1 million and the annuity earns a guaranteed annual return of 12 percent. The payments are to begin at the end of five years. (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. b. C. Answer is complete but not entirely correct. Present value Annual cash flows Annual cash flows S S S 1,493,888.72✔✔ 147,266.66✔ 231,726.94 X
a. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $200,000 for 20 years? Assume that the annuity will earn 12 percent per year. b. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.1 million and the annuity earns a guaranteed annual return of 12 percent. The payments are to begin at the end of the current year. c. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.1 million and the annuity earns a guaranteed annual return of 12 percent. The payments are to begin at the end of five years. (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. b. C. Answer is complete but not entirely correct. Present value Annual cash flows Annual cash flows S S S 1,493,888.72✔✔ 147,266.66✔ 231,726.94 X
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 15P
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Vijay shiyal
Transcribed Image Text:a. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $200,000 for 20 years? Assume that
the annuity will earn 12 percent per year.
b. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.1
million and the annuity earns a guaranteed annual return of 12 percent. The payments are to begin at the end of the current year.
c. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.1
million and the annuity earns a guaranteed annual return of 12 percent. The payments are to begin at the end of five years.
(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
a.
lb.
C.
Answer is complete but not entirely correct.
Present value
Annual cash flows
Annual cash flows
$
$
$
1,493,888.72✔✔
147,266.66✔
231,726.94 X
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