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- Suppose you are going to receive $12,700 per year for six years. The appropriate interest rate is 7.6 percent. a-1. What is the present value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2.What is the present value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-1. Suppose you plan to invest the payments for six years. What is the future value if the payments are an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-2. Suppose you plan to invest the payments for six years. What is the future value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)Which is a better way to invest $7,000 if the concern is simply the future value: a 2-year certificate of deposit paying 2.2% compunded quarterly, or a 2-year annuity that divides that $7,000 into 8 quarterly payments and pays 5.6% compunded quarterly? Round your answer to the nearest cent. A) The 2- year certificate of deposit has a future value of $7313.99 B) The 2-year annuity has a future value of $Find the PV of an ordinary annuity that pays $1,000 each of the next 6 years if the interest rate is 16%. Then find the FV of that same annuity. Round your answers to the nearest cent. PV of ordinary annuity: $ fill in the blank 25 FV of ordinary annuity: $ fill in the blank 26 g. How will the PV and FV of the annuity in part f change if it is an annuity due rather than an ordinary annuity? Round your answers to the nearest cent. PV of annuity due: $ fill in the blank 27 FV of annuity due: $ fill in the blank 28
- Suppose you are going to receive $14,500 per year for five years. The appropriate interest rate is 8 percent. a-1. What is the present value of the payments if they are in the form of an ordinary annuity? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a-2. What is the present value of the payments if the payments are an annuity due? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-1. Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? Note: Do not round intermediate..What is the future value of an ordinary annuity that pays $4,600 per year for 4 years? The appropriate interest rate is 7 percent. Answers: a. $10,000 b. $6,452 c. $20,423.74 d. $4,657 An investment will pay $600 at the end of each of the next 2 years, $700 at the end of Year 3, and $1,000 at the end of Year 4. What is its present value if other investments of equal risk earn 6 percent annually? Answers: a. $1,134 b. $5,324 c. $2,345.50 d. $2,569.77 *PLEASE SHOW ALL STEPS! CANNOT USE EXCEL TO SOLVE! CAN USE CALCULATOR FUNCTIONS!!f. Find the PV of an ordinary annuity that pays $1,000 each of the next 4 years if the interest rate is 15%. Then find the FV of that same annuity. Round your answers to the nearest cent. PV of ordinary annuity: $ FV of ordinary annuity: $ g. How will the PV and FV of the annuity in part f change if it is an annuity due rather than an ordinary annuity? Round your answers to the nearest cent. PV of annuity due: $ FV of annuity due: $
- American Capital offers a 7 year ordinary annuity with a guaranteed rate of 6.35% compounded annually. How much should you pay for one of these annuities if you want to receive payments of ₱10 000 annually over the 7-year period? Show solution. A.) 54, 136.98 B.) 55,135.98 C.) 56, 136.98 D.) 57, 137.98What is the future value of an ordinary annuity of $2,000 for 4 years, if interest rates are 6 percent ? Answer: Future Value of Annuity is $8749.23 Qusetion: What is the future value of the same annuity due?1. First, you must solve the word problem on Ordinary Annuity. To the closest centavo, round up the total. a. Estimate the future value of an ordinary annuity with a periodic deposit of P7,000.00 at 8 percent compounded semi-annually for six compounding periods. 2. Solve the following problem on Deferred Annuity (Round all amounts to the closest centavo) a. Find the present value of 12 quarterly payments of P12,000.00 each. If the interest rate is 9 percent compounded quarterly, the first payment will be due after one year from the loan date. 3. The money of a millionaire was placed in two different banks. He made a Php 30,000,000 investment in Bank A, which offers a 6 percent interest rate that is compounded semi-annually. He also made an investment of Php 40,000,000 in Bank B, which offers interest at a rate of 7 percent per year compounded annually. Which of the two investments will provide a greater yield in three years? Please justify your response. 4. Annaliza would want to…
- A You are considering investing in a security that will pay you $1000 in 30 years. If the appropriate discount rate is 10%, what is the present value of this investment? Assume these investments sell for $365, in return for which you receive $1000 in 30 years, what is the rate of return investors earn on this investment if they buy it for $365? b What is the accumulated sum of each of the following streams of ordinary annuity payments? $35 per half-year for three and a half years at 14% p.a. compounded half- yearly. $25 a year for three years compounded annually at 2%. $500 a year for 10 years compounded annually at 5%An investor is considering an annuity that pays $40,000 per year for four years. 1. Assuming the first $40,000 is paid in a years time given a discount rate of 4% what should the investor pay for this annuity today? 2. Assuming the first $40,000 is paid out immediately what should the investor pay today? (Asssume same discount rate). 3. If the investor pays $130,000 today and assuming the first paymentarrives in a years time, what would this investment’s internal rate of return be? (Asssume same discount rate). 4. What would the investor pay today if the first payment arrived in 5years time? (Asssume same discount rate). 5. If the investor invests $40,000 per year at the end of the next 4 years what would this be worth in 4 years time? (Asssume same discount rate).If the present value of an ordinary, 6-year annuity is $8,800 and interest rates are 9.5 percent, what’s the present value of the same annuity due? (Round your answer to 2 decimal places.) PV = $_______.__
