You buy an annuity-immediate for $5000 that pays $200 quarterly for next 8 years. Calculate the...

You buy an annuity-immediate for $5000 that pays $200 quarterly for next 8 years. Calculate the nominal annual interest rate convertible half-yearly.

Solutions

Expert Solution

Solution is as follows:

jeff jeffy answered 3 weeks ago

Next > < Previous

Related Solutions

An annuity pays $1500 weekly for 4 years and then $4100 weekly for the next 7...

An annuity pays $1500 weekly for 4 years and then $4100 weekly for the next 7 years. Determine the discounted value if the interest rate is j52=7.9%. *Do not round intermediate steps* Charlie borrowed $112000 today. The interest rate on the loan is j1=4.3% for the first 5 years, then it changes to j1=7.2% thereafter. To repay the loan, Charlie makes yearly payments of R dollars (in the end of year) from year 3 to year 11. What is R?...

You have a chance to buy an annuity that pays $24,000 at the beginning of each...

You have a chance to buy an annuity that pays $24,000 at the beginning of each year for 5 years. You could earn 4.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?

Dipper has a 10 year increasing annuity immediate that pays $100 at the end of the...

Dipper has a 10 year increasing annuity immediate that pays $100 at the end of the first year, $200 at the end of the second year, ... , and $1000 at the end of the 10th year. He exchanges the annuity for a perpetuity of equal value that pays X at the end of each year. If the effective annual interest rate is 3%, find the value of X

A ten-year annuity immediate pays 2000 at the end of the first year, and payments increase...

A ten-year annuity immediate pays 2000 at the end of the first year, and payments increase by 100 each year. If the annuity yields 6% annual effective interest, determine the Macaulay duration.

How much is the price of a perpetual annuity with quarterly payments of $200 starting 4...

How much is the price of a perpetual annuity with quarterly payments of $200 starting 4 years from now and discount rate (dr) 8%? Price is always the period prior to the first payment.

You buy a stock at $200 and buy an at-the-money 8-month European put option on the...

You buy a stock at $200 and buy an at-the-money 8-month European put option on the stock at a price of $15. The continuously compounded risk-free interest rate is 4%. Calculate the 8-month profit if the 8-month stock price is $180.

An annuity pays $47 per year for 22 years. What is the future value (FV) of this annuity at the end of those 22 years, given that the discount rate is 8%?

An annuity pays $47 per year for 22 years. What is the future value (FV) of this annuity at the end of those 22 years, given that the discount rate is 8%?Select one:$3649.06$3127.76$2606.47$1563.88

What is the present value of annuity that pays $200 at the end of each quarter...

What is the present value of annuity that pays $200 at the end of each quarter of a 10-year term if the interest rate is 5%? a. $3,256.39 b. $4,256.39 c. $5,256.39 d. $6,256.39 e. None of the above.

Consider an annuity contract that pays out $45 at the end of each of the next...

Consider an annuity contract that pays out $45 at the end of each of the next four 6-month intervals (payments are to be made 6, 12, 18, and 24 months from today). What is this annuity's Macaulay duration (in years)? Assume this contract is currently trading at a yield of 6%. Round your answer to 3 decimal places. For example if your answer is 5.5175, then please write down 5.518. Hint: First price this contract, and then calculate its duration...

What is the future value of an annuity that pays $4,200 per year for the next...

What is the future value of an annuity that pays $4,200 per year for the next 12 years? The interest rate is 8.2%. Please show work.

Subjects