Answered: the payments occurred 5. Caiculating…

the payments occurred 5. Caiculating Annuity Cash Flows. If you put up $20,000 today in exchange for a 8.5 percent, 12-year annuity, what will the annual cash flow be? orever?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 20E

See similar textbooks

Related questions

Q: What is the future value of a 7%, 5 year ordinary annuity that pays 300 each year? If this was an…

A: When the Cash Flows occurs at the end of each period, the annuity is called a Regular Annuity. In…

Q: What’s the present value of a perpetuity that pays $1,000 per year beginning1 year from now, if the…

A: Computation:

Q: What is the future value four years from now of each of the following cash-flow streams if money can…

A: Future value is the worth of a certain deposit made today at a specific time in future.

Q: What's the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If this was an…

A: For ordinary annuity, payment takes place at the end of every period and for annuity due, payment…

Q: You have the opportunity to buy a perpetuity that pays $1,000 annually. Your required rate of return…

A: Payments each year = Cash flow = C = $1000 Rate of Interest = r = 13.2% = 0.132

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: A. What's the future value of a 10%, 5-year ordinary annuity that pays $100 each year? Round your…

A: A. Future value is $610.51.

Q: What is the value today of an annuity of $5,900 per year, with the first cash flow received three…

A: According to the information provided, the first cash flow is three years from today and the last…

Q: A perpetuity will make its first payment in 20 years. The first payment will be $5,000, and future…

A: Perpetuity means a series of infinite numbers of payments of the same size occurs in an equal…

Q: In this problem. Deposits of 500 will be deposited starting at time 5 and will go on up to time 18.…

A: Solution:- “n” means the number of times a deposit is made.

Q: much of the value of the account can be attributed to the interest earned? 5)You want have $12,000…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 1- If the future value of an ordinary, seven-year annuity is $6,000 and interest rates are 7.5…

A: Note: As per the policy, we are supposed to solve the first question at a time. Kindly repost the…

Q: money right now. Find FV Annuity: If you deposit your annual payments into an account earning 2% per…

A: Payments = $10,000 Interest rate = 2% Time period = 10 years

Q: Suppose you have an opportunity to buy an annuity that pays $3,500 at the end of each year for 6…

A: Present Value of Annuity=Annuity×1-11+ratetimerate

Q: An annuity pays $145.00 each period for 10 periods. For these cash flows, the appropriate discount…

A: Using Future value function in Excel

Q: What is the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If this were an…

A: Calculation of future value of annuity:

Q: what's the future value of the same annuity due?

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: What is the present value of an annuity of $7,100 per year, with the first cash flow received three…

A: Calculation of Present Value of Annuity:The cash flow is received in the third year.The present…

Q: What is the future value of a three-year, ordinary $ 1,000 annuity when money is worth

Q: An annual perpetuity has a constant cash flow of $1000. If the interest rate is 7% compounded…

A: Given, Annual cash flow: $1,000Interest rate: 7%Present value of perpetuity=Annual cash…

Q: f you put up $41,000 today in exchange for a 5.1 percent, 15-year annuity, what will the annual cash…

A: Present value (PV) = $41000 Interest rate (r) = 5.1% Number of annual payments (n) = 15

Q: If you put up $38,000 today in exchange for a 6.75 percent, 14-year annuity, what will the annual…

A: Solution- We know that PV=PMT[(1-(1+r)^-n)/r] Where PMT= Periodic payment r= rate n= number of…

Q: The present value of an annuity is payable for 4 years, with the first payment at the end of 10…

A: An annuity is a series of payments for a certain period of time and at a certain rate of interest.…

Q: If you put up $37,000 today in exchange for a 6.25 percent, 15-year annuity, what will the annual…

A: Time value of money states that the worth of money in present is always more than that of future…

Q: An annuity is set up that will pay $1,500 per year for nine years. What is the present value (PV) of…

A: Present Value of annuity refers to the present value of all the future payments of and series of…

Q: What's the future value of a 12%, 5-year ordinary annuity that pays $700 each year? If this was an…

A: Given information: Annual payment is $700 Interest rate is 12% Number of years is 5

Q: 4. What are the present values of the following cash flows? A. $1,000 to be received in 8 years if…

A: a. PV = FV / (1 + r / n)nt Where, PV = Present value FV = Future value r = Rate of interest…

Q: d. Calculate the future sum of $1,000, given that it will be held in the bank for 5 years earning an…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: How much is the present value of a perpetuity of P1,000 payable semi-annually if money is worth 5%…

A: Present value of perpetuity is calculated for those securities from which keeps generating cash…

Q: What is the future value of $117,000 invested for 5 years at 14% compounded monthly?

A: Componded Monthly: When a investment is componded monthly then the interesr will be calculated on…

Q: What is the future of a 7%, 5-years ordinary annuity that pays $300 each year? If this were an…

A: Annuity Amount= $300 each year Rate of Interest (r)= 7% Time period= 5 years

Q: You deposit 20,000 today into a fund paying ?(1)=8%. From this fund, you receive 10 payments of R,…

A: Under present value concept, present value is the current monetary value of the future receipt or…

Q: A perpetuity will pay $1000 per year, starting five years after the perpetuity is purchased. What is…

A: The question is based on the concept of perpetuity payment and concept of time value of money.Future…

Q: you put up $45,000 today in exchange for a 6.4 percent, 15-year annuity, what will the annual cash…

A: Given information: According to the question, the present value is $45,000 Rate of interest : 6.4%…

Q: Which is a better way to invest $7,000 if the concern is simply the future value: a 2-year…

A: Option 1 - Investing $ 7000 for 2 years at 2.2% quarterly Option 2- Investing divided $ 7000 in…

Q: What's the future value of a 7 percent, 5-year ordinary annuity that pays $300 each year?

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

Q: How much money do you need to invest now for you to receive 15000 semi-annually for 7 years if it…

A: Semi-annual payment = 15000 Time period = 7 Semi-annual interest rate = 7.5%

Q: What is the present value of an annuity due of $10,000 per year, with the first cash flow received 5…

A: Present value of an annuity the present value of future cashflows

Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

vear fromLIow.
urn
I, Wa.
the
payments occurred i
orever?
5. Caiculating Annuity Cash Flows. If you put up $20,000 today in exchange for
a 8.5 percent, 12-year annuity, what will the annual cash flow be?

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
(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 $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.
What is the monthly payment for a home costing $475,000 with a 20% down payment and the balance financed for 30 years at 6.5%? (a) State the type. A. present valueB. future value C.ordinary annuityD.amortizationEsinking fund (b) Answer the question. (Round your answer to the nearest cent.)
What is the future value of $118,000 invested for 5 years at 11% compounded monthly? (a) State the type. A. ordinary annuityB. present value C. amortizationD. sinking fundE. future value (b) Answer the question. (Round your answer to the nearest cent.)
If you put up $51,000 today in exchange for a 6.25 percent, 15-year annuity, what will the annual cash flow be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the future value of $117,000 invested for 5 years at 14% compounded monthly? (a) State the type. present value future value amortization ordinary annuity sinking fund (b) Answer the question. (Round your answer to the nearest cent.)
PLEASE TYPE IT AND NOT HANDWRITTEN The present value of an annuity is P75,000. Quarterly payments of P5,000 are invested at 4% compounded quarterly. How many regular payments will be made?
For each of the following situations involving annuities, solve for the unknown (?). Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (i = interest rate, and n = number of years) Present Value Annuity Amount i n1. ? $ 3,000 8% 52. $ 242,980 75,000 ? 43. 161,214 20,000 9 ?4. 500,000 80,518 ? 85. 250,000 ? 10 4 Sandy Kupchack just graduated from State University with a bachelor’s degree in history. During her four years at the university, Sandy accumulated $12,000 in student loans. She asks for your help in determining the…