Question
In: Finance
Lucy purchases a retirement annuity that will pay her $2,000 at the end of every six...
Lucy purchases a retirement annuity that will pay her $2,000 at the end of every six months for the first twelve years and $800 at the end of every month for the next seven years. The annuity earns interest at a rate of 3.1% compounded quarterly.
a. What was the purchase price of the annuity?
Round to the nearest cent
b. How much interest did Lucy receive from the annuity?
Round to the nearest cent
Solutions
Expert Solution
Unfortunately not able to submit 228 rows, I have trimmed repeating portions:
| Interest rate | 3.10% | |||
| Initial Amount to be paid | $ 81,456.10 | |||
| Total Interest received over the years | $ 33,741.84 | |||
| Months | Amount received | Interest | Contribution from principle | Balance Principle |
| 0 | $ - | $ 81,456.10 | ||
| 6 | $ 2,000.00 | $ 1,267.46 | $ 732.54 | $ 80,723.56 |
| 12 | $ 2,000.00 | $ 1,256.06 | $ 743.94 | $ 79,979.62 |
| 18 | $ 2,000.00 | $ 1,244.49 | $ 755.51 | $ 79,224.11 |
| 24 | $ 2,000.00 | $ 1,232.73 | $ 767.27 | $ 78,456.84 |
| 30 | $ 2,000.00 | $ 1,220.79 | $ 779.21 | $ 77,677.64 |
| 36 | $ 2,000.00 | $ 1,208.67 | $ 791.33 | $ 76,886.31 |
| 42 | $ 2,000.00 | $ 1,196.36 | $ 803.64 | $ 76,082.66 |
| 108 | $ 2,000.00 | $ 1,047.59 | $ 952.41 | $ 66,372.92 |
| 114 | $ 2,000.00 | $ 1,032.77 | $ 967.23 | $ 65,405.68 |
| 120 | $ 2,000.00 | $ 1,017.72 | $ 982.28 | $ 64,423.40 |
| 126 | $ 2,000.00 | $ 1,002.43 | $ 997.57 | $ 63,425.83 |
| 132 | $ 2,000.00 | $ 986.91 | $ 1,013.09 | $ 62,412.74 |
| 138 | $ 2,000.00 | $ 971.15 | $ 1,028.85 | $ 61,383.89 |
| 144 | $ 2,000.00 | $ 955.14 | $ 1,044.86 | $ 60,339.03 |
| 145 | $ 800.00 | $ 155.88 | $ 644.12 | $ 59,694.90 |
| 146 | $ 800.00 | $ 154.21 | $ 645.79 | $ 59,049.11 |
| 147 | $ 800.00 | $ 152.54 | $ 647.46 | $ 58,401.66 |
| 148 | $ 800.00 | $ 150.87 | $ 649.13 | $ 57,752.53 |
| 149 | $ 800.00 | $ 149.19 | $ 650.81 | $ 57,101.72 |
| 212 | $ 800.00 | $ 34.33 | $ 765.67 | $ 12,523.24 |
| 213 | $ 800.00 | $ 32.35 | $ 767.65 | $ 11,755.59 |
| 214 | $ 800.00 | $ 30.37 | $ 769.63 | $ 10,985.96 |
| 215 | $ 800.00 | $ 28.38 | $ 771.62 | $ 10,214.34 |
| 216 | $ 800.00 | $ 26.39 | $ 773.61 | $ 9,440.72 |
| 217 | $ 800.00 | $ 24.39 | $ 775.61 | $ 8,665.11 |
| 218 | $ 800.00 | $ 22.38 | $ 777.62 | $ 7,887.50 |
| 219 | $ 800.00 | $ 20.38 | $ 779.62 | $ 7,107.87 |
| 220 | $ 800.00 | $ 18.36 | $ 781.64 | $ 6,326.24 |
| 221 | $ 800.00 | $ 16.34 | $ 783.66 | $ 5,542.58 |
| 222 | $ 800.00 | $ 14.32 | $ 785.68 | $ 4,756.90 |
| 223 | $ 800.00 | $ 12.29 | $ 787.71 | $ 3,969.19 |
| 224 | $ 800.00 | $ 10.25 | $ 789.75 | $ 3,179.44 |
| 225 | $ 800.00 | $ 8.21 | $ 791.79 | $ 2,387.65 |
| 226 | $ 800.00 | $ 6.17 | $ 793.83 | $ 1,593.82 |
 jeff jeffy answered 2 years agoRelated Solutionsolly purchases a retirement annuity that will pay her $2,500 at the end of every six...olly purchases a retirement annuity that will pay her $2,500 at
the end of every six months for the first twelve years and $300 at
the end of every month for the next five years. The annuity earns
interest at a rate of 4.3% compounded quarterly.
a. What was the purchase price of the
annuity?
Round to the nearest cent
b. How much interest did Holly receive from the
annuity?
Round to the nearest cent
Abigail wishes to purchase an annuity which will pay her $2250 at the end of each...Abigail wishes to purchase an annuity which will pay her $2250
at the end of each month for 10 years. The rate of interest on the
annuity is 6% compounded monthly. Find the present value of this
cash flow.
Tom receives pension payments of $6000.00 at the end of every six months from a retirement...Tom receives pension payments of $6000.00 at the end
of every six months from a retirement fund of $90 000.00. The fund
earns 8.00% compounded semi-annually.
a) How many payments will Tom receive?
b) What is the size of the final pension payment?
1. Lucy deposited $1,300 at the end of every month into an RRSP for 9 years....1. Lucy deposited $1,300 at the end of every month into an RRSP
for 9 years. The interest rate earned was 4.50% compounded
semi-annually for the first 3 years and changed to 4.75% compounded
monthly for the next 6 years. What was the accumulated value of the
RRSP at the end of 9 years? ( pls give me solution too )
2. While buying a new car, Helen made a down payment of
$1,100.00 and agreed to make month-end payments...
An annuity pays $1 at the end every odd year and $2 at the end of...An annuity pays $1 at the end every odd year and $2 at the end
of each even year (not counting year 0) for 10 years. If the
effective annual rate is 6%, what is the present value of the
annuity?
Show all your work leading to your final answer
An annuity with a cash value of $11,200 pays $1,720 at the beginning of every six...An annuity with a cash value of $11,200 pays $1,720 at the
beginning of every six months. The investment earns 10% compounded
semi-annually.
(a) How many payments will be paid?
(b) What is the size of the final annuity payment
A small business owner contributes $2,000 at the end of each quarter to a retirement account...A small business owner contributes $2,000 at the end of each
quarter to a retirement account that earns 10% compounded
quarterly. (a) How long will it be until the account is worth at
least $150,000? (Round your answer UP to the nearest quarter.) 43
quarters (b) Suppose when the account reaches $150,000, the
business owner increases the contributions to $4,000 at the end of
each quarter. What will the total value of the account be after 15
more years? (Round...
What is the present value of an ordinary annuity that pays $300 every six months for...What is the present value of an ordinary annuity that pays $300
every six months for four years if the discount rate is 5.6% per
year?
Question 5 options:
A)
$1,994.34
B)
$2,109.56
C)
$2,123.79
D)
$2,098.25
E)
$2,281.41
What is the present value of the following annuity? 4083 every year at the end of...What is the present value of the following annuity? 4083 every
year at the end of the year for the next 7 years, discounted back
tot he present at 17.61% per year, compounded annually?
What is the present value of the following annuity? $759 every year at the end of...What is the present value of the following annuity?
$759 every year at the end of the year for the next 6 years,
discounted back to the present at 17.51 percent per year,
compounded annually?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
ADVERTISEMENT
|