An annuity that is established with a lump sum for the purpose of providing the investor with regular payments for the rest of the investor's life is called a(n) blank annuity. immediate delayed
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A: Note: As per the policy we are supposed to solve one question at a time. Kindly repost the further…
Q: Which of the following are characteristics of a perpetuity? Check all that apply. The present…
A: Hi there, Thanks for posting the questions. But as per our honor code, we should answer the first…
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A: Principal amount = $60 Time period = 10 years Interest rate = 5% Compounded = semi-annually
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A: Solution: Amount of deposit = $100 Quarterly interest rate = 8% / 4 = 2% Time (In quarters) = 15*4 =…
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A: Given: M=$200n= semiannually r=8%t =25 yearsn =2
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A: Given information: Annuity payment is $700 Time period is 5 year Interest rate is 8%
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A: PMT = 7500 For Semi annual compounded: i = 6%/2=3% period (n) = 3*2=6
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Q: Find the present value of the ordinary annuity. (Round your answer to the nearest cent.) Amount of…
A: Amount of Deposit(m) = $400 Frequency of deposit(n) = Quaterly Rate(r) is 14% Time (t) is 25 Years…
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- Which is NOT an essential element of an ordinary annuity? Select the correct response: The payments are made at equal interval of time. The amounts of all payments are equal. The first payment is made at the beginning of the first period. Compound interest is paid on all amounts in the annuity.Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. The present value of a perpetuity is calculated by dividing the amount of the payment by the investor’s opportunity interest rate. In a perpetuity, returns—in the form of a series of identical cash flows—are earned. A perpetuity continues for a fixed time period. The principal amount of a perpetuity is repaid as a lump-sum amount. Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $5,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to…refers to receiving a set monthly payment for the rest of your life. O Certain Period Annuity O Single Life Annuity O Joint & Survivor Annuity O Lump-sum Annuity
- With a deferred ordinary annuity, the first payment was made one or more periods prior. the first payment begins one or more periods later. the last payment is made first. the first payment is made last.Which of the following is false? The future value of a deferred annuity is equal to the future value of an annuity not deferred. If the first payment is received at the end of the fifth period, it means the ordinary annuity is deferred for five periods. The present value of a deferred annuity is less than the present value of an annuity not deferred. To calculate the present value of a deferred annuity, determine the present value of an ordinary annuity for the entire period and subtract the present value of the payments which were not received during the deferral period.Perpetuity is a type of annuity which has infinite period of payments. The present value of a perpetuity equals to the annual payment divided by the required rate of return. True or False
- Which of the following statement is true? a) An ordinary annuity is an annuity in which the cash flow occurs at the start of each period b) None of the above c) A deferred annuity is an annuity in which the first cash flow occurs at the end of the time period between each subsequent cash flow d) with a credit foncier loan ( a loan for a fixed period with regular repayments) as time passes a smaller proportion of each repayment goes to paying off the interest on the loanA series of equal payments occurring at equal interval of time, known as. Ans: ____________ A type of annuity where the first payment is made at the end of the first period. Ans: ___________________ A type of annuity whose sum is infinite. Ans: _____________ A type of annuity where the first payment is made at the beginning of the first period. Ans: ______________ A type of annuity where the first payment is made later after the end of the first period. Ans: ___________________Select all the statements on perpetuities that are correct. a. The present value of a perpetuity increases if the interest rate increases. b. If I multiply the present value of a perpetuity with the interest rate then I get the value of a single payment of the cashflow stream. c. The present value value of a perpetuity is independent of the interest rate. d. The present value of a perpetuity is infinite as all the payments add up to infinity. e. A perpetuity describes a constant cashflow at the end of each year that continues infinitely long.
- Annuity due is an annuity whose payment is due at the END of each period. TRUE OR FALSE?The present value of an annuity due of t payments of $1 per period is the same as Multiple Choice (C) (1 + r) times the present value of an equivalent ordinary annuity. (A) the present value of an ordinary annuity of t payments. (B) $1 plus the present value of an ordinary annuity with t -1 payments. None of the answers are correct. (B) and (C).The present value of an ordinary annuity is determined on the last day of the first annuity period. on the first day of the first annuity period. on the last day of the last annuity period. immediately before the first cash flow in the series occurs.