The present sum needed to provide for an annual withdrawal of $2,000 for 20 years beginning 5 years from nowat an interest rate of 0.12 per year is closest to:Note: The given interest is already in decimal form. Do not round in between solution. Final answer round to the nearest whole number. No need putcomma and UOM (unit of measure).

Annuity is a series of payments or withdrawals made at periodic intervals. The way this withdrawal…

Answered: The present sum needed to provide for…

The present sum needed to provide for an annual withdrawal of $2,000 for 20 years beginning 5 years from now at an interest rate of 0.12 per year is closest to:

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 13E

See similar textbooks

Related questions

Q: Consider the following date of Labanos Company: Year Investment Cash Inflow 1 4,000 1,000 2 3 2,000…

A: Payback period = Initial investment/Annual cash flow The above formula is useful if their is a…

Q: Mike purchases a bicycle costing $176.90. State taxes are 4% and local sales taxes are 3%. The store…

A: The purchase price is the amount paid by an investor for an investment, and it serves as the…

Q: Find the compound amount for the deposit and the amount of interest earned. $8800 at 4% compounded…

A: The compound amount can be calculated with the help of future value function

Q: A company is going to change all light bulbs of its buliding. The initial cost is 57000 . all bulbs…

A: Given, Details about a light bulb company.

Q: Q3. Ricardo plans to own a 1 hectare lot after 10 years for an estimated cost of P5M. To accumulate…

A: Here, Required Amount (FV) at the end of 10th year to purchase lot is P5,000,000 Interest Rate (r)…

Q: payment on a house. If you can invest your money at 3.25% compounded month, what payment would have…

A: Future Value of Annuity: It is the future value of the present cash flow stream and is estimated by…

Q: purchased a 10-year $200,000 variable annuity that based its rate of return the performance of a…

A: Th amount to be received from the annuity each month depends on interest rate earned by the fund…

Q: Suppose you bought a sofa for a total purchase price of $1,184.97. State taxes were 4%. What was the…

A: Sales tax rate Sales tax rate is imposed on the purchase price of the item. The amount of sales tax…

Q: Determine the minimum trade in value that the manufacturer should receive and still obtain the new…

A: An operating expense, also known as an operating expenditure, operational expense, operational…

Q: Wila is a risk-analyst at Deli Bank (DB), a commercial bank with operations in Zambia. DB is…

A: A portfolio is a collection of financial assets such as stocks, bonds, commodities, cash, and cash…

Q: Why was the disposal value used for only replace and not upgrading?

A: Disposal Value will be used only in case of replacement because current machine will be sold if we…

Q: You own a portfolio that has $3,000 invested in Stock A and $4,100 invested in Stock B. Assume the…

A: The expected return on portfolio is calculated as weighted proportion of stock multiplied by the…

Q: These statements are presented to you for evaluation: Statement I – When property is transferred in…

A: The total financial amount of an individual's assets and property at the time of death is referred…

Q: 15,000 is invested in an account at time 0. At the end of 4 years, an additional $15,000 IS Hivested…

A: Here, To Find: Part a. Value in the account at the end of 10 years =? Part b. In which account the…

Q: what is the future value of an mortar $300 after 4 years if it has invested in an account paying an…

A: Here, Amount is $300 Time Period is 4 years

Q: quarterly. What is the value of the annuity at the end of the 12 years and how much of the value is…

A: An annuity is the type of payment plan where we exchange a lump sum amount for periodic fixed…

Q: Finding the Ordinary and Exact Interest

A: Interest refers to the amount paid by the borrower to bank on the amount borrowed at a fixed or…

Q: 12 Suppose that the risk-free zero curve is flat at 1.3% per annum with continuous compounding and…

A: The most prevalent type of credit derivative is the credit default swap (CDS). A CDS functions…

Q: What will the monthly payments be? (ii) Find the total amount of interest paid when the loan is…

A: Loan: It is the amount due by the borrower to the lender for taking a loan. The borrower makes…

Q: Question 21 Harana Corp. issues P3,000,000, 15%, 120-day commercial papers and pays 1.25% as…

A: Solution:- Net proceeds means the amount received in hand after meeting all the expenses.

Q: Consider the following information: STF Probability of State Economy of Economy .25 .45 .30 Rate of…

A: The expected return is calculated as sum of product of probability and rate of return

Q: You want to be able to withdraw $50,000 from your account each year for 25 years after you retire.…

A: Here, Annual amount to withdraw = $50,000 Time in years after retirement = 25 years Time to…

Q: Consider the following four bonds that pay annual coupons: Years to Bond maturity Coupon YTM A 1 0%…

A: A bond is a debt instrument that is used by companies to raise capital. They are tradeable on the…

Q: A $100 bond with 6% annual coupons that can be called on any coupon date10 years to 20 years from…

A: Callable bond A callable bond is a bond that can be called and retired at any time within the call…

Q: Assuming that the mandate to a portfolio manager was to invest in a broadly diversified portfolio of…

A: A portfolio manager is a professional who makes investment decisions and executes investing…

Q: You believe that Rose, Inc., the stock is going to fall and you’ve decided to sell 1,300 shares…

A: Given, Number of shares 1300 Current price of share is $58 Initial margin is 60%

Q: In the marine resource model, there is a sustained yield for each effort level. Explain how the…

A: The yield curve is a line that represents the yield (interest rate) of bonds with the same credit…

Q: Project 2 Harris Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering…

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

Q: How emergence or evolution of entrepreneurship took plate? Please explain in Detail.

A: Today, entrepreneurs are paving the way for success as entrepreneurs. They find opportunities, lead…

Q: The company has a project with a 5-year life that requires an initial investment of $200,000, and is…

A: Net present value = Present value of future Cashinflows - initial investment

Q: You are working as a financial advisor for Bradford financial Services Ltd based on Leeds Road which…

A: Investment options: An investor with an objective of investment has several avenues available for…

Q: A new office building was constructed 8 years ago by a consulting engineering firm. At that time…

A: Loan amount is P 5000,000 Interest rate is 10%

Q: Cost of Trade Credit Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year…

A: Given, The details about the Grunewald Industries. Grunewald Industries sells on terms = 2/10,net…

Q: Modigliani & Miller show that dividend policy can also be considered irrelevant. Yet, unexpected…

A: Dividends: Dividends are cash flows that a company pays its common stockholders. Unlike preferred…

Q: McClintock Corporation is considering investir $60,000 in a new piece of machinery that will…

A: Present value of the future value is the value without interest that is equivalent today considering…

Q: A $96,000 mortgage is to be amortized by making monthly payments for 20 years. Interest is 8.6%…

A: An amortized loan is one that has planned, monthly payments that are applied to both the interest…

Q: A stock has a beta of 1.14, the expected return on the market is 10.8 percent, and the risk- free…

A: The expected return of the stock can be calculated with the help of CAPM equation

Q: For the following ordinary annuity, determine the size of the periodic payment. Future Payment…

A: This series of equal payments is called an annuity. The payment amount can be computed using the PMT…

Q: Suppose you group all the stocks in the world into mutually exclusive portfolios (each stock is in…

A: Expected return on market portfolio This can be calculated by sum of the…

Q: Jody has been dreaming to purchase a car for $22,000 i. Calculate the monthly payment for the…

A: A loan is a sum of money borrowed from a third party, such as a bank, and then repaid with interest…

Q: Required: 2. Estimate by the accumulated benefits approach the amount of Davenport's annual…

A: The monetary benefits provided by the employer to its employee after retirement is known as…

Q: Why do you think that having a price structure important?

A: Pricing strategies are the methods companies use to price products and services. Almost all…

Q: Suppose you bought a bond with an annual coupon rate of 7.1 percent one year ago for $894. The bond…

A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to…

Q: 14. Robert is in grade 12 and lives on his own. With student loans and a part-time job, he has a…

A: Solution:- Amount of money in hand at end of month means the total money available after meeting all…

Q: A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be…

A: Here, Note: We are solving Part d to g as mentioned in the question.

Q: How does shareholder value relate to capital structure?

A: The combination of various types of external funds, known as capital, used to finance a corporation…

Q: A property is expected to have NOI of $124,000 the first year. The NOI is expected to Increase by 5…

A: A participating loan: A participating loan is a loan where the lender also has the right to a share…

Q: Manjean is making car payments of $662 per month for the next 3 years. Manjean knows that the car…

A: Formula Car price = P*[1-(1+I)-N]/I Where P - Monthly payment i.e. $662 I - Monthly interest rate…

Q: a hypothetical financial instrument pays 10% annual interest permanently. It pays interest at the…

A: Here, Annual interest rate = 10% YTM = 12% monthly To Find: Part a. Macaulay duration =? Part b.…

Q: Question 3 What is the proper solution for this problem? B. On August 1, 2021, the board of…

A: When a major unit of business is disposed of or sold to another company it is known as discontinued…

Question

The present sum needed to provide for an annual withdrawal of $2,000 for 20 years beginning 5 years from now
at an interest rate of 0.12 per year is closest to:
Note: The given interest is already in decimal form. Do not round in between solution. Final answer round to the nearest whole number. No need put
comma and UOM (unit of measure).

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

Step 1 Explanation

VIEW

Step 2 Answer

VIEW

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

(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.
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.
Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2 withdrawals: 40,000 at the end of 4 years and 50,000 at the end of 10 years. Analyze the problem to determine the required deposit, stating the procedure to follow and the tables to use in developing the solution.
The present sum needed to provide for an annual withdrawal of $5,000 for 15 years beginning 5 years from now at an interest rate of 0.06 per year is closest to: Note: The given interest is already in decimal form. Do not round in between solution. Final answer round to the nearest whole number.
The present sum needed to provide for an annual withdrawal of $1,500 for 25 years beginning 5 years from now at an interest rate of 10% per year is closest to: a. $8,500 b. more than $10,000 c. $9,300 d. less than $6,500
The present sum needed to provide for an annual withdrawal of $1,500 for 25 years beginning 5 years from now at an interest rate of 10% per year is closest to: a. LESS THAN $6500 b. MORE THAN $10,000 c. $ 9,300 d. $ 8,500
The present sum needed to provide for an annual withdrawal of $2,000 for 20 years beginning 5 years from now at an interest rate of 0.09 per year is closest to?
What discount rate would make you indifferent between recieving $3515.00 per year forever and $5920.00 per year for 30.00 years? Assume the first payment of both cash flow streams occurs in one year. (Answer format: percentage, round to two decimal places)
The future value of $200,000 invested at a 7% annual rate, compounded quarterly for 3 years is _____. (Do not round your intermediate calculations. Round the final answer to the nearest two decimal places.)
Suppose you deposit $2,000 at the end of eachquarter for ten years at an interest rate of 9% compounded monthly. What equal end-of-year depositover the ten years would accumulate the same amountat the end of the ten years under the same interestcompounding? To answer the question, which of thefollowing is correct?(a) A = $2,000(F/A, 2.267%, 4)(b) A = $2,000(F/A, 9%12 , 40) * (A/F, 9%, 10)(c) A = [$2,000(F/A, 2.25%, 40)] * (A/F, 9%, 10)(d) None of the above
What is the present value of $2,225 per year, at a discount rate of 9 percent, if the first payment is received 8 years from now and the last payment is received 23 years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)