Calculate the present value of the annuity assuming that it is (1) an ordinary annuity (2)...

Calculate the present value of the annuity assuming that it is (1) an ordinary annuity (2) an annuity due. Comparing the two types of annuities, all else equal, which type is more preferable? Why? Amount of annuity=$12,000 Interest rate=7% Deposit period (years)=3

Ordinary annuity = 33696, annuity due = 31492, ordinary annuity is better because it discounts for one less year.

Ordinary annuity = 31492, annuity due = 33696, annuity due is better because it discounts for one less year.

Ordinary annuity = 33696, annuity due = 31492, ordinary annuity is better because it compounds for one more year.

Ordinary annuity = 31492, annuity due = 33696, annuity due is better because it compounds for one more year.

Expert Solution

jeff jeffy answered 2 months ago

1. Find the following values assuming a regular, or ordinary, annuity: The present value of $400...

1. Find the following values assuming a regular, or ordinary, annuity: The present value of $400 per year for ten years at 10 percent The future value of $400 per year for ten years at 10 percent The present value of $200 per year for five years at 5 percent The future value of $200 per year for five years at 5 percent

The present value of an annuity due is equal to the present value of an ordinary...

The present value of an annuity due is equal to the present value of an ordinary annuity times (1 + i). Select one: True False

An ordinary annuity that pays $300 per year has a present value of $21,000. Assuming a...

An ordinary annuity that pays $300 per year has a present value of $21,000. Assuming a cost of capital of 6%, how much would this value change if it were an annuity due? Round your answer to 2 decimal places. You need a new car and are considering leasing versus buying. Lease Option: You could lease the car for 6 years starting today for $6,000 per year with the first payment being due at the end of year 1. Purchase...

1. The present value of an ordinary annuity is determined on the last day of the...

1. The present value of an ordinary annuity is determined on the last day of the first annuity period. on the first day of the first annuity period. on the last day of the last annuity period. immediately before the first cash flow in the series occurs. (Click here to access the time value of money tables to use with this problem.) 2. What is the present value (rounded to nearest dollar) of a series of bond interest payments of...

1) a. Find the present value of an ordinary annuity if you have a plan to...

1) a. Find the present value of an ordinary annuity if you have a plan to pay an annuity of Rial Omani B at the end of each week for A years. Bank Muscat offers the discount rate of E % compounded weekly. b. Suppose that you have deposited Rial Omani (B × E) in the special account of Bank Nizwa at the end of each semi year for C months. If the special account of Bank Nizwa offers at...

Amount of annuity-$32,000 Interest rate-9% Period (years)-11 a. Calculate the present value of the annuity assuming...

Amount of annuity-$32,000 Interest rate-9% Period (years)-11 a. Calculate the present value of the annuity assuming that it is (1) An ordinary annuity. (2) An annuity due. b. Compare your findings in parts a(1) and a(2). All else being identical, which type of annuity—ordinary or annuity due—is preferable? Explain why.

eBook Present Value of an Annuity Find the present value of thefollowing ordinary annuities. Do...

Present Value of an Annuity Find the present value of the following ordinary annuities. Do not round intermediate calculations. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown...

Calculate the future value of an annuity, with Case A being an ordinary annuity and Case...

Calculate the future value of an annuity, with Case A being an ordinary annuity and Case B being and annuity due. Case A - Annuity 17,000, Interest Rate 3%, Deposit Period 9, Case B - Annuity 1,000, Interest Rate 7%, Deposit Period 11.

Calculate the future value of an annuity, with case A being an ordinary annuity and case...

Calculate the future value of an annuity, with case A being an ordinary annuity and case B being an annuity due. Case Annuity Interest Rate (%) Deposit Period (Yrs) Future Value ($) A 19,000 5 8 B 9,000 9 10 Case Annuity Interest Rate (%) Deposit Period (Yrs) Future Value

1. The present value of an ordinary annuity: a.is equal to the amount of money invested...

1. The present value of an ordinary annuity: a.is equal to the amount of money invested in the future b. represents a lump sum payment c. determines the amount of money that needs to be invested today d.can be determined only using the tables 2. Which of the following statements is correct? a. present value may only be found using a table b.present value concerns both the present, and future values c.present value concerns primarily the future value d.present value...

Question