What's the difference between an ordinary annuity and an annuity due? Why would you prefer to receive an annuity due for $10,000 per year for 10 years than an otherwise similar ordinary annuity?

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 annual rate of return on a perpetuity that costs $500,000 and pays $2,000 monthly?

A: Following details are given in the question: Cost of perpetuity = $500000 Monthly payment (cashflow)…

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: What is the present value of a perpetuity that pays $3,800 per year if the appropriate interest rate…

A: Given details are : Annual payment = $3800 Interest rate = 5% = 0.05 From these details we need to…

Q: Why would you prefer to receive an annuity due for $10,000 per year for 10 yearsthan an otherwise…

A: An ordinary annuity is an annuity which pays the cash flows at the end of the period. Under the…

Q: What is the present value of a constant perpetuity of $17 per year if the discount rate is 10…

A: Present Value:  The present value (PV) is the present sum of a series of fixed payments. The series…

Q: Suppose that the constant and perpetual cash flow is $1,000 and the discount rate is 8%. What is the…

A: A perpetuity is a payment which has no end, it continues forever. It is a stream of cash flow that…

Q: Find the present value of an annuity of $ 365.00 per month for 26 years at a rate of 3 1/4% interest…

A: Monthly payment (P) = $ 365 Period = 26 Years Number of monthly payments (n) = 26*12 = 312 Annual…

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: Give an annual opportunity cost of 10%,what is the future value of a $3,000 ordinary annuity for 10…

A: The present value of the annuity is the current worth of a cash flow series at a certain rate of…

Q: What is the present value of an annuity that pays $200 per month for 10 years if money is worth 5%…

A: Present Value:It is the discounted value of cash flows of different period or sum of future money…

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: What is the present value of perpetuity of $100 per year if the appropriate discount rate is 7…

A: Time value of money-It is based on the concept that money earned today is worth more than similar…

Q: What's the present value of a perpetuity that pays $1,700 per year if the appropriate interest rate…

A: The present value of perpetuity is calculated as ratio of cash flows and the discount rate

Q: What’s the present value of a perpetuity that pays $300 per year if the appropriate interest rate is…

A: present value of a perpetuity = Annual payment/Discount rate

Q: An annuity offers $1,000 for 10 years. If you can earn 12 percent annually on your funds, what is…

A: Annuity Amount = $1,000 Years(n) = 10 Interest Rate(r) = 12% Present Value of Annuity =…

Q: annuity

A: Annuity can be defined as series of payments which are made at regular intervals. Examples of…

Q: How much less is a perpetuity of $2,000 worth than an annuity due of the same amount for 30 payments…

A: Given information: Annuity : $2,000 Number of payments : 30 Rate of interest : 10%

Q: What is the present worth of P500 annuity starting at the end of the third year and continuing to…

A: Annuities are  basically the insurance contracts that guarantee to return a set amount of money on a…

Q: hat is the present value of a perpetuity paying $1500 each year, if the effective annual interest…

A: A perpetuity is a series of uniform cash flows over an indefinite period of time.

Q: What is the relationship between the value of an annuity and the level of the interest rate? Suppose…

A: The question gives the following information:

Q: Under what interest rates would you prefer a perpetuity that pays $2 million a year to a one- time…

A: This question require us to compute the interest rate in case of a perpetuity.

Q: What is the annual rate of return on a perpetuity that costs $500,000 and pays $1,000 monthly?

A: Following details are given in the question: Cost of perpetuity = $500000 Monthly payment (cashflow)…

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 a 5%, 5 year ordinary annuity that pays $800 each year? If this was an…

A: The future value of the annuity is the total value of all the payments which is occurred regularly…

Q: What is the future value of an annuity due if your required return is 10%, and payments are Php1,000…

A: Given:

Q: the rate of return

A: solution:- The present value of an annuity paid in perpetuity is PV = PMT/i where i is the rate.…

Q: you would earn if you paid $1

A: A perpetuity is a series of uniform cash flows over an indefinite period of time.

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

A:

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: 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: What is the future value of a $890 annuity payment over six years if interest rates are 10 percent?…

A: Annual payment (P) = $ 890 Annual interest rate (R) = 10% Period (N) = 6 years

Q: What is the present value of a 3-year annuity of $200 if the discount rate is 5%?

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

Q: What’s the present valu

A: A perpetuity is a series of uniform cash flows over an indefinite period of time.

Q: Suppose you save $500 per year at the end of each year for 15 years and earn 8.25% interest per…

A: When a payment is made repeatedly at regular time intervals it is referred to as Annuity. Present…

Q: How much less is a perpetuity of $2,000 worth than an annuity due of the same amount for 30 payments…

A: An annuity is a series of monetary payments. A perpetuity is a sort of annuity that lasts…

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: What is the rate of return you would earn if you paid $3,680 for a perpetuity that pays $85 per…

A: In this question we require to compute the rate of return on a perpetuity.

Q: A 10%, 4-year annuity pays $500.00 each year. What is the future value of the annuity?

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

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: Suppose you put $ 600 a month for retirement into an annuity earning 7.5% compounded monthly. If you…

A: To calculate the number of years, excel NPER function is used.

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.