4G H 10:13 O Ol01:57:06 RemainingMultiple ChoiceT purchased a life annuity forP1,500,000 which will pay himP150,000 a year. What will Tinclude in his gross income on the11th year of the policy?P150,000P1,350,000P1,500,000ZERO39 of 60

Taxability of Life Annuity: The tax treatment of annuities is deferred, which means that taxes are…

Answered: T purchased a life annuity for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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13–21. At the beginning of each period for 10 years, Merl Agnes invests $500 semiannually at 6%. What is the cash value of this annuity due at the end of year 10? PROVIDE THE FOLLOWING FOR EACH PROBLEM N= I= PV= PMT= FV= C/Y= P/Y =
Chapter 10 Discussion Q2 A perpetuity will pay $900 per year, starting five years after the perpetuity is purchased. What is the present value (PV) at time 0, given that the interest rate is 11%? Show your steps. A) $2695 B) $4312 C) $5390 D) $3234
Q. No. 02: Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities.$300 per year for 10 years at 10%$100 per year for 5 years at 5%$300 per year for 5 years at 0%Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.
J2. The future value of $100 today earning 8 percent for three years is: A.126 b. 76 c. 119 d. 108. Please answer
12. What is the future value in 180 days of $200,000 deposited now at 9% p.a. simple interest? Select one: a. $191,500.52 b. $209,000.00 c. $218,000.00 d. $208,876.71
5. You would like to retire with P1 million on your 60th birthday. If you start saving equal annual amounts on your 26th birthday, make your last deposit on your 60th birthday, and earn 10% interest on your money, how much must you invest each year to achieve your goal?a.P3,343.06b.P3,436.14c.P3,558.41d.P3,689.71
Kk105. Find the annual premium. Face Value: $30,000 Age of Insured: 50 Sex of Insured: M Type of Policy: Universal life
10. Dale wants to invest money in a 6% CD account that compounds semiannually. Dale would like the account to have a balance of $50,000 five years from now. How much must Dale deposit to accomplish her goal? Choose closest answer. A) $35,069. B) $43,131. C) $37,205. D) $35,000. PV 10pds 3% .7441 ,PV 10pds 6% .86262, PV 5 pds 6%, 7018 PV 5 pds 3% .7000
Kk.47. A person has two investment alternatives, both of which are $15,000.first offers a payment of $5,500 at the end of each of the next four years; on the other hand, the second alternative offers a lump-sum payment of $27,500 at the end of four years. the second alternative offers a lump sum payment of $27,500 at the end of the four years.years. If the AARR = 15%. Calculate the IRR of both alternatives. a) 19.72% y 13.63% b) 17.29% y 16.36% c) 12.79% y 18.36% d) N.A
8. What annuity is required over 12 years to equate with a future amount of 20,000? Assume i = 6% A. 4,185,54 B. 2,185.54 C. 3,185.54 D. 1.185.54
MCQ'S: 16) An insurance company offers you an end-of-year annuity of $48,000 per year for the next 20 years. They claim your return on the annuity is 9 percent. What should you be willing to pay today for this annuity? a.$429,600 b.$398,144 c.$438,192 d.$408,672 17) Al Corbin is 25 years old today and wishes to accumulate enough money over the next 35 years to provide for a 20-year retirement annuity of $100,000 at the beginning of each year, starting with his 60th birthday. He can save $2,000 at the end of each of the next 10 years and $3,000 each year for the following 10 years. How much must he save each year at the end of years 21 through 35 to obtain his goal? Assume that the average rate of return over the entire period will be 10%. a.$9,642 b.$24,289 c.$12,321 d.$26,969 18) Firms carry out share repurchase agreements in a number of ways, including all of the…
11. Mr. Hopper expects to retire in 30 years, and he wishes to accumulate $1,000,000 in his retirement fund by that time. If the interest rate is 12 percent per year, how much should Mr. Hopper put into his retirement fund at the end of each year in order to achieve this goal? A. $4,143.66B. $8,287.32C. $4,000.00D. $12,483.17

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T purchased a life annuity for P1,500,000 which will pay him P150,000 a year. What will T include in his gross income on the 11th year of the policy? P150,000 O P1,350,000 O P1,500,000 O ZERO