Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $2,100 per quarter for 15 years, if the account earns 4% per year PV = $

Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $2,100 per quarter for 15 years, if the account earns 4% per year PV = $

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter4: Managing Your Cash And Savings

Section: Chapter Questions

Problem 7FPE: Calculating interest earned and future value of savings account. If you put 6,000 in a savings...

See similar textbooks

Related questions

Q: le

A: Given information :

Q: Calculate the future value of an ordinary annuity consisting of annually payments of $1,500 for 6…

A: An ordinary annuity is that annuity in which payments are made at the end of each period.

Q: What is the future value of a series of $4,500 annual payments received at the end of each of the…

A: Future value is the value of an asset which grows to some new value. Annuity due means the payment…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: To calculate the present value of annuity we will use the below formula Present value =…

Q: Find the future value of a 6-year annuity due with payments of $4,300 and an annually compounded…

A: An annuity is a contract that pays a periodic sum for a predetermined period for a lump-sum amount…

Q: Suppose payments were made at the end of each month into an ordinary annuity earning interest at the…

A: Future value of an annuity is $55000 Annual interest rate is 5.5% per year compounded monthly Time…

Q: An investment is expected to result in equal payments of $9940.00 at the end of each quarter for the…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: future

A: Formula for compound interest is: A = P[(1+r/n)^nt] Where A is the future value, P is the principal…

Q: Find the present value of the decreasing annuity necessary to fund a withdrawal of $100 per month…

A: Present Value:- It is the formula through which one can evaluate the worth of future income of the…

Q: en a nominal rate of 15% compounded semi-annually for 12 years in an ordinary annuity. Determine the…

A: Given information : Nominal rate = 15% Time period = 12 years

Q: Compute the simple interest INT for the specified length of time and the future value FV at the end…

A: Simple interest on a loan of $12000 for 6 months(0.5 years) at a rate of 3%.

Q: a. What is the amount of the annuity purchase required if you wish to receive a fixed payment of…

A: In this we have to calculate present value FACTOR of annuity and from that we can calculate the…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Given: Payment = $1,400 Years = 20 Interest rate = 4%

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Here, Withdrawal amount (PMT) is $200 per month Time Duration is 10 years Total time duration is :…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. HINT (See…

A: Here, Withdrawal amount (PMT) is $1200 per quarter Time Duration is 10 years Total time duration is…

Q: If $35,500 is invested at 6.2% for 30 years, find the future value if the interest is compounded the…

A: Honor code: Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: Suppose payments were made at the end of each month into an ordinary annuity earning interest at the…

A: In the given problem, the future value of the annuity is given which is $70,000 Time is 14 years…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: An annuity is a financial term that depicts a series of cash flows at equal time intervals for a…

Q: Starting at the end of this year, you plan to make annual deposits of $7,000 for the next 10 years…

A: MS-Excel --> Formulas --> Financials --> FV

Q: Find the future value of an ordinary annuity of $6,000 paid quarterly for 2 years, if the interest…

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

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: given, A= $200 R=2% N = 20

Q: Find the present value of the decreasing annuity necessary to fund a withdrawal of $1,500 per…

A: The annuity payout provides information that with the regular withdrawals, what would be the…

Q: An investment is expected to result in equal payments of $300 at the end of each of the next 8 years…

A: Note: It is a case where no question is specified to solve among the multiple questions posted, so…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: The present worth of money is known as present value. To calculate the present value of n annuity,…

Q: Suppose an annuity pays $2000 at the end of each 3 month period for 3.5 years at an interest rate of…

A: given, A = $2000 n = 3.5 r = 4% pa but it is compounded quarterly therefore, frequency of…

Q: Find the future value of the following annuity due. Then determine how much of this value is from…

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

Q: Find the future value of an ordinary annuity of $300 paid quarterly for 8 years, if the interest…

A: Solution: Future value of annuity is the future value of a series of payments of equal amount at…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: The present value concept is a discounted value concept that determines the value of future amounts…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Present value computes the existing value of future benefits by discounting future worth with a…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given

A: Present Value of Annuity: It represents the present worth of the future annuity periodic payments…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

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

Q: Find the present value Vof the annuty account necessary to fund the withdranal given. (Aume end of…

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

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Present value can be calculated as total of present value of annuity amount along with present value…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: To calculate present value: PV=Principal payments1+rate12n×12

Q: Jones expects an immediate investment of $91,461.30 to return $21,000 annually for six years, with…

Q: Find the future value of an ordinary annuity of $5,000 paid quarterly for 5 years, if the interest…

A: The formula of future value of ordinary annuity is as follows- Future value of ordinary annuity…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Present value of annuity is the value of an asset at time 0. Present value helps in making…

Q: Suppose payments were made at the end of each month into an ordinary annuity earning interest at the…

A: Using excel PMT function

Q: you wish to receive incresing quater-end payments with 3.7% growth -rate quater for the next 3…

A: Quarter End Payments First Quarterly Payment = 540 Time Period = 3 years * 4 = 12 quarters or 36…

Q: Find the periodic payments PMT necessary to accumulate the given amount in an annuity account.…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: Suppose payments were made at the end of each month into an ordinary annuity earning interest at the…

A: Annuity means number of payments made at equal interval of time and equal in size. Ordinary annuity…

Q: What is thevpresent value of an annuity of 1,600 per year for 10 years, with the first payment…

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

Q: Suppose payments will be made for 5 1 4 years at the end of each month from an ordinary annuity…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given

A: Present value (PV) is the value of future’s money at today’s date. PV of annuity refers to the…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Formula to Calculate Present Value of Annuity is Pmt × [1-(1+r)-nr ] where Pmt is amount of…

Q: Find the present value of the decreasing annuity necessary to fund a withdrawal of $100 per month…

A: The question gives the following information:

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Present Value:-It is the concept where it is analyzed that the value of the present investment is…

Q: Find the future value of an ordinary annuity of $2,000 paid quarterly for 2 years, if the interest…

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

Q: If $82,000 is invested in an annuity that earns 5.3%, compounded quarterly, what payments will it…

A: The question gives the following information: Present value=$82,000Rate=5.3%Time period=4.5 years

Question

Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and
compounding at the same intervals as withdrawals. Round your answer to the nearest cent.)
$2,100 per quarter for 15 years, if the account earns 4% per year
PV = $
Need Help?
Read It
Watch It

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Concept

VIEW

Answer)

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?
Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
(1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.