Deferred annuity:
A deferred annuity refers to the annuity which does not make payments immediately. It is a type of annuity contract which makes either monthly contribution to the account over time or leave their money in the account with a belief that it will grow.
Present Value:
The value of today’s amount to be paid or received in the future at a compound interest rate is called as present value. The following formula is used to calculate the present value of an amount:
To determine: The amount that Company C borrowed assuming that the first of the five annual $10,000 payments was not due for three years.
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GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
- QUESTION 2 A perpetuity-immediate pays 100 per year, Immediately after the fifth payment, the perpetuity is exchanged for a 25-year annuity-immediate that will pay X at the end of the first year. Each subsequent annual payment wili be 8% greater than the preceding payment.. The annual effective rate of interest is 8%. Calculate X. a. 74 Ob.64 C 84 6d. 94 Se. 54arrow_forwardQuestion 12 save this response. Common information: A loan is amortized by level payments made at the end of each quarter, for 25 years. The monthly rate is 1%. The principal in the 29th payment is 8370. Find OLB69 OA 1,115,185.53 OB. 1,101,108.22 OC. The correct answer is not shown here. O D. 1,430,370.34 OF. 1,301,108.22arrow_forwardKnowledge Check Question 22 Austin V Espate Nicole is planning for retirement. She deposits S825 at the end of each year in an ordinary annuty that pays 4% interest, compounded annually. Answer each part. Do not round any intermediate computations nor answers. If necessary, refer to the lat.otinaocialformulas (a) Find the totat value of the annuity at the end of the 1" year. (b) Find the total value of the annuity at the end of the 2 year (c) Find the total value gf the annuity at the end of the 3 year.arrow_forward
- Question 15 Consider a policy with a R5000 straight deductible. Determine the amount that the insurer would pay for a loss of R12 000. 1 R7 000 2 R5 000 3 R12 000 4 The insurer will not be liable for any payment.arrow_forwardReview Problem 9 #30 algo (LO6) Three equal payments were made one, two, and three years after the date on which a $17,200 loan was granted at 10.5% compounded monthly. If the balance immediately after the third payment was $6,056.94, what was the amount of each payment? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Each payment $arrow_forwardProblem 5-4 Present Value of an Annuity (LG5-4) What's the present value of a $850 annuity payment over five years if interest rates are 9 percent? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Present valuearrow_forward
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