What is the present value of a perpetuity of annual payments where the first payment is in one year and each payment is $4599.99? assume that time zero is now and the effective interest rate per year is 14%
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7. What is the present value of a perpetuity of annual payments where the first payment is in one year and each payment is $4599.99?
assume that time zero is now and the effective interest rate per year is 14%.
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- 11. What is the present value of an annuity of 19 annual payments where the first payment is in twelve years and each payment is $1,200? assume that time zero is now and the effective interest rate per year is 14%.13. What is the present value of a perpetuity of annual payments where the first payment is in forty years and each payment is $40,749.79? assume that time zero is now and the effective interest rate per year is 14%.What is the present value of a perpetuity paying $1500 each year, if the effective annual interest rate is a constant 12.68% per year?
- What is the present value of $800 per year annuity at an interest rate of 12%? Hint: the future value is zero. This is 5 recurring payments.What is the present worth of annually payments ( 2000 $ ) if the first payment will deposit after five from now , and the last one will deposit at begin of the fifteenth year ? Assume interest rate ( 7 % ) ?A one-year annuity that pays $100 semi-annually will starts its payment in 6 months from now. APR is 8 percent compounded semi-annually. a. What is the present value of the annuity? b. What is the effective annual rate? c. Now consider another one-year annuity that makes a “single” payment in a year from now. How much should it pay to the investor if it is equally valuable to the previous annuity?
- 7.4. Suppose that an annuity pays $10,000 per year for 10 years, with payments made continuously. We will compute the present value of this income stream, assuming an annual interest rate of year 7.4. Suppose that an annuity pays $10,000 per year for 10 years, with payments made continuously. We will compute the present value of this income stream, assuming an annual interest rate of 4% (r = 0.04/year). (a) Determine upper and lower bounds for the present value of the first year's payments. Bear in mind that a dollar paid immediately is worth $1, but a dollar paid at the end of the year is worth e" dollars. (b) Repeat part (a) for years 2 through 10. 7.6. Exercises 211 (c) Add up the pieces for years 1 through 10 to get upper and lower bounds for the present value of the entire annuity. (d) Average the upper and lower bounds from part (c) to get a good estimate for the present value of the annuity. This is (approximately) what an in- surance company would charge you for this annuity.Suppose the interest rate is 6.4% APR with monthly compounding. What is the present value of an annuity that pays $95 every 6 months for 7 years? (Note: Be careful not to round any intermediate steps less than six decimal places.)Suppose the interest rate is 8.0% APR with monthly compounding. What is the present value of an annuity that pays $100 every six months for five years? (Note: Be careful not to round any intermediate steps less than six decimal places.)
- Suppose the interest rate is 6.9% APR with monthly compounding. What is the present value of an annuity that pays $100 every three months for six years? (Note:Be careful not to round any intermediate steps less than six decimal places.)Suppose that $500 is deposited at the end of every quarter for 6 years in an account that pays 8% compounded quarterly. What is the interest rate per period? Find the future value of the annuity.(a) What is the present value of an ordinary annuity of $405 per month for 4 years at 6% interest compounded monthly? (b) What is the present value of this investment if it is an annuity due?