Baxter desires to purchase an annuity on January 1, 2023, that yields him five annual cash flows of $11,000 each, with the first cash flow to be received on January 1, 2026. The interest rate is 10% compounded annually. The cost (present value) of the annuity on January 1, 2023, is ________.
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Baxter desires to purchase an
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- Baxter desires to purchase an annuity on January 1, 2023, that yields him five annual cash flows of $11,000 each, with the first cash flow to be received on January 1, 2026. The interest rate is 10% compounded annually. The cost (present value) of the annuity on January 1, 2023, is ________. (Use spreadsheet software or a financial calculator to calculate your answer. Round intermediary calculations two decimal places and round your final answer to the nearest dollar.) Group of answer choices $55,000 $28,481 $45,869 $34,462Bridget Jones has a contract in which she will receive the following payments for the next five years: $11,000, $12,000, $13,000, $14,000, and $15,000. She will then receive an annuity of $17,000 a year from the end of the 6th through the end of the 15th year. The appropriate discount rate is 11 percent. a. What is the present value of all future payments? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)James plans to receive a monthly annuity of $1514 for the next 28 years as part of his inheritance. The interest rate is 9.27 per annum compounded monthly. Calculate the present value (PV) of this annuity. $1,514.00 $163.32 $1,959.87 $1.29 $653.29
- Mr. Dayani purchases an annuity with funds from his savings account on January 1, 2018. The annuity has a 5 year term, and cost him $25,000. Payments are made annually on December 31 in the amount of $5,772. The annuity provides an effective yield of 5%. How much of the annuity payment is taxable in 2018? a. $772. b. $1,250. c. $5,000. d. NilAlejandra has an payout annuity that pays 66% annual interest compounded monthly. This is a 2020 year annuity and the beginning amount of the annuity is $10,000.00.What is the monthly amount the annuity pays?$ What is the total amount paid out by the payout annuity over the 2020 year period? $ What is the total amount of interes earned by the annuity ove the 2020 year period? $ Round all answers to the nearest cent. Do not enter dollar signs.June Stickney purchased an annuity on January 1, 2019, which, at a 12% annual rate, would yield $6,000 each June 30 and December 31 for the next 6 years. What was the cost of the annuity to Stickney? Round your answer to two decimal places. $ fill in the blank 4 Five equal annual contributions are to be made to a fund, with the first deposit on December 31, 2019. Determine the equal contributions that, if invested at 10% compounded annually, will produce a fund of $30,000 on December 31, 2024. Round your answer to two decimal places. $ fill in the blank 5 Beginning on December 31, 2020, 6 equal annual withdrawals are to be made. Determine the equal annual withdrawals if $11,000 is invested at 10% interest compounded annually on December 31, 2019. Round your answer to two decimal places. $ fill in the blank 6
- An annuity pays $300 each on January 1 in the Year 2025, 2030, 2035, 2040 and 2045. The annual effective interest rate is 4%. Calculate the present value as of January 1, 2021. Round the answer to the nearest dollar.Bridget Jones has a contract in which she will receive the following payments for the next five years: $3,000, $4,000, $5,000, $6,000, $7,000. She will then receive an annuity of $10,500 a year from the end of the sixth year through the end of the fifteenth year. The appropriate discount rate is 13 percent. a. What is the present value of all future payments? (Use Excel to arrive at the answer. Round the final answer to the nearest dollar amount.) Present value b. If she is offered a buyout of the contract for $32,000, should she do it? Yes NoKatie is planning to receive an annuity of $7,545 per year for the next 38 years as part of her retirement plan. The interest rate is 0.06 per annum compounded annually. Calculate the present value (PV) of this annuity $6,191.79 $1,484.60 $4,920.36 $5,190,960.00 $112,013.21
- Today is January 1, 2022. Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive. The estimated probability of Roy surviving for the next 4 years is stated in following table. The yield rate is assumed to be j₁ = 4.5% p.a. Calculate the premium value. Round your answer to three decimal places. Year 1 2 3 4 Probability of surviving from start of year to end of year a. $17490.442 b. $19100.000 c. $14729.264 d. $17651.074 0.83 0.62 0.46 0 Today is 1 July, 2022, Georg plans to purchase a corporate bond with a coupon rate of j2 = 3.15% p.a. and a face value of $100. This corporate bond matures at par. Its maturity date is 1 January, 2025. The yield rate is assumed to be j₂ = 4.7% p.a. Assume that this corporate bond has a 9% chance of default in any six-month period during its term. Assume, also, that, if default occurs, Georg will receive no further payments at all. Calculate Georg's purchase price. Round your answer…Bob purchases an annuity that will pay him $10,000 a year for the next 15 years starting a year from now. Assuming a 5% annual interest rate, what is the value of this annuity? Choose the closes. a) $150,000 b) $103,797 c) $124,622 d) $77,217Don purchases a 20-year annuity-immediate evaluated at an annual effective rate of 5.5%. The first payment will be made at the end of year six in the amount of 2,000. The subsequent payments increase by 100 each year. Calculate the present value of the annuity at purchasing.
