What is the relationship between the value of an annuity and the level of the interest rate? Suppose you just bought a 10 year annuity of $5,200 per year at a current interest rate of 10% per year. What happens to the value of your investment if interest rates suddenly dropped to 5%? What is the what if interest rates suddenly rise to 15%?

Q: What is the present value of an ordinary annuity of $1,000 per year for 9 years discounted back to…

A: Present value of annuity payment - it means present value of future annual equal payment made to a…

Q: If you wanted to pay off a loan of $20,000 in 10 years at a nominal interest rate of 7% compounded…

A: To determine the value of the monthly payments, we first need to determine the periodic interest…

Q: What is the present value of a $400 perpetuity if the interest rate is 8%? If interest rates doubled…

A: Given data; deposit amount = $400 interest rate ( r1) = 8% interest rate (r2) = 16%

Q: A. An ordinary annuity selling at $2,514.15 today promises to make equal payments at the end of each…

A: In ordinary annuity, payment occurs at the end of the every period. Value of annuity is the present…

Q: Suppose that you took out a mortgage loan and should repay $500 per month in the next 20 years. In…

A: Interest rate is the amount the lender charges the borrower and is the percentage of principal, or…

Q: Suppose you are going to receive $13,500 per year for five years. The interest rate is 8.4% a. What…

A: PV of Ordinary Annuity = 13500*a<5> = 13500*(1-(1+i)^-5)/i = 13500*(1-1.084^-5)/0.084 =…

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 is the present value of the payments if they are in the form of an ordinary annuity? What is…

A: The present value can be calculated as follows : Calculations for above :

Q: The amount of money originally put into an investment is known as the present value P of the…

A: The concept used:

Q: What is the PV of an ordinary annuity with 10 payments of $7,900 if the appropriate interest rate is…

A: As per Bartleby honor code, when multiple questions are asked, the expert is required only to solve…

Q: 1- If you invested $10,000 in an investment account and you expect it to double in 4 years, what…

A: 1. Investment= $10000 time= 4 years

Q: Assume you are investing $10,000 today for a given amount of time at a given interest rate. What…

A: To understand this concept, we need to differentiate between nominal interest rate and real interest…

Q: Your investment advisor says you can buy an annuity now that will pay you $25,000 per year for the…

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

Q: A new investment opportunity for you is an annuity that pays $800 at the beginning of each year for…

A: Beginning of period Annuity Annuity Amount = 800 Time Period (N) = 3 years Rate = 5.5%

Q: What is the future value of an ordinary annuity of $1,000 per year for 9 years compounded at 10…

A: Given: Annual cash flow (A)=$1000 Number of years (n) =9 years Interest rate(r) = 10% = 0.10

Q: You have an annuity  that pays $15 per year for 61 years. What is the future value (FV) of this…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: Suppose you're going to receive $7800 per year for five years. the appropriate discount rate is…

A: An annuity is defined as a stream of payments over a fixed period of time. Most people normally…

Q: Calculate the future value of the following annuities, then answer the questions that follow. What…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Suppose you save $4,000 per year at the end of each year for 10 years and earn 8.5% interest per…

A: Since you have not mentioned the specific question we will just answer the first question in case…

Q: Find the future value of OMR10,000 invested now after five years if the annual interest rate is 8…

A: FUTURE VALUE FORMULA: simple interest : future value = present value ×1+N ×r compounding: future…

Q: If bank offers you to double your money in 12 years, what is the interest rate that it gives?

A: Given, Number of years 12.

Q: The present value of an annuity is the sum of the discounted value of all future cash flows. You…

A: Given: Particulars Amount Amount Amount Amount Years (NPER) 10 10 10 10 Interest…

Q: What's the difference between an ordinary annuity and an annuity due? Why would you prefer to…

A: Note: Interest arate is not provided,hence "i" is taken as 5% for calculation. Same formula can be…

Q: An investment pays simple interest, and quadruples in 10 years. What is the interest rate?

A: Time Period = 10 Years

Q: Suppose you are going to receive $17,500 per year for five years. The appropriate interest rate is…

A:

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: invest it at a nominal interest rate of 8%. Given the expected inflation is 5% per year, what is the…

A: Given, Nominal interest rate = 8% Expected inflation = 5%

Q: the future value of an ordinary annuity

A: 1. FV of Ordinary Annuity​=C×(1+i)n−1​/i where: C=Cashflow per period i= interest rate n= number…

Q: Not too long ago, interest rates were essentially zero. If interest rates fall to 1/100th of a basis…

A: When there is no interest than there would be no increase in value of money with time and there will…

Q: What is the future value of a 5%, 5-year ordinary annuity that pays P8,000 each year? If this was an…

A:

Q: An investment will pay ¥13,400 in five years.  What is the present value of this investment today…

A: Present value is calculated by discounting the future cash flow at the discount rate.   Present…

Q: Ten years ago, you put $5,000 in a savings account. Today, your investment has the purchasing power…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: es it take for your money to grow to ten times its original value if the interest rate of 5% per…

A: The given problem can be solved using NPER function in excel. NPER function computes no. of years/…

Q: es it take for your money to grow to ten times its original value if the interest rate of 10% per…

A: The given problem can be solved using NPER function in excel. NPER function computes no. of years/…

Q: Martin has borrowed £250,000 to buy a house. The mortgage rate is 5% per year. How much more will…

A: A loan is a sort of debt that is taken on by an individual or another institution. The lender, which…

Q: You have the opportunity to invest in several annuities. Which of the following 10-year annuities…

A: Annuities are payment received at fixed intervals for fixed periods of time.

Q: you want to buy an ordinary annuity that will pay you $4,000 a year for the next 20 years. You…

A: the maximum price you would be willing to pay for the annuity is its present value. in an ordinary…

Q: What is the present value of this annuity?

A: Introduction: The term annuity can be defined as set of payments that is received by the investor at…

Q: What is the future value of an $800 annuity payment over 10 years if the interest rates are 6…

A: Future value is the value of an asset in the future. It is based on an assumed rate of growth. It is…

Q: How long does it take for your money to grow to ten times its original value if the interest rate of…

A: The given problem can be solved using NPER function in excel. NPER function computes no. of years/…

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: long does it take for your money to grow to ten times its original value if the interest rate of 7%…

A: The given problem can be solved using NPER function in excel. NPER function computes no. of years/…

Q: What is the PV of a perpetuity paying $6 each month, beginning next month, if the monthly interest…

A: Present value of a Perpetuity is equal to the PMT / Annuity value divided by the rate of interest…

Q: Suppose you are going to receive $10,000 per year for 5 years. The appropriate interest rate is 11%.…

A: Here, Annuity Amount is $10,000 Time Duration is 5 years Interest Rate is 11%

Q: If you deposit money today in an account that pays 6.5% annual interest, how long will it take to…

A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…