You receive an annuity immediate for 20 years, where for the first 10 years, payments are...

You receive an annuity immediate for 20 years, where for the first 10 years, payments are 1000 and then starting at the end of the 11th year increase by 10% (so the payment at the end of the 11th year is 1100. Find the accumulated value of the annuity if effective annual interest i = 7%.

Expert Solution

An annuity immediate is that type of an annuity where the payments are made at the beginning of the period i.e (the first payment will be made at Year 0)

In order to calculate the accumulated value or Present Value of annuity, we will discount the cash flows with the effective annual interest rate

Attached below is the calculation and values obtained :-

Value of Annuity = 11,951.06

jeff jeffy answered 5 hours ago

a 20-years annuity-immediate has annual payments . The first payment is 100 and subsequent payments are...

a 20-years annuity-immediate has annual payments . The first payment is 100 and subsequent payments are increased by 100 until they reach 1000. The remaining payment stay at 1000. the annual effective intersst rate 7.5% . What is the coast of this annuity?

Assume you are to receive a 10-year annuity with annual payments of $800. The first payment...

Assume you are to receive a 10-year annuity with annual payments of $800. The first payment will be received at the end of year 1, and the last payment will be received at the end of year 10. You will invest each payment in an account that pays 7 percent compounded annually. Although the annuity payments stop at the end of year 10, you will not with draw any money from the account until 20 years from today, and the...

Q3) Maria Garcia has an (arithmetic) annuity immediate that will make 10 annual payments. The first...

Q3) Maria Garcia has an (arithmetic) annuity immediate that will make 10 annual payments. The first payment is P = $1000 and payment increases by Q = $100 from the payment before. The effective annual interest rate is i = 2.75%. a) Compute both the present and future value of Maria Garcia’s annuity by showing it is equivalent to the following 2 annuities: • Annuity A: Level pay, $900 for 10 years • Annuity B: Arithmetic increasing annuity immediate: starts...

An annuity immediate has 40 initial quarterly payments of 20 followed by perpetuity of quarterly payments...

An annuity immediate has 40 initial quarterly payments of 20 followed by perpetuity of quarterly payments of 25 starting in the eleventh year. Find the present value at 4% convertable quarterly.

An annuity-immediate with 20 annual payments starts with a payment of 300 and each payment thereafter...

An annuity-immediate with 20 annual payments starts with a payment of 300 and each payment thereafter is 25 more than the previous payment. The effective annual interest rate is 5%. Calculate the present value. Be sure to include the appropriate equation or expression of value that you use. Instead of a 20 year annuity-immediate, it is a perpetuity. What would the present value be in that case?

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.

A fifteen-year annuity-immediate has monthly payments. The first payment is $300 and the monthly increase is...

A fifteen-year annuity-immediate has monthly payments. The first payment is $300 and the monthly increase is $50. Calculate the accumulated value of the annuity if the annual effective interest rate is 4%. pls show work and formula, thanks!

A 10-year annuity of 20 $8,900 semiannual payments will begin 11 years from now, with the...

A 10-year annuity of 20 $8,900 semiannual payments will begin 11 years from now, with the first payment coming 11.5 years from now. If the discount rate is 8 percent compounded semiannually, what is the value of this annuity ten years and eight years from now? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) What is the value of the annuity today?

1. Suppose that you will receive annual payments of $27,400 for a period of 20 years....

1. Suppose that you will receive annual payments of $27,400 for a period of 20 years. The first payment will be made 6 years from now. If the interest rate is 8.00%, what is the value of the annuity in year 5, what is the current value of this stream of cash flows? (Do not round intermediate calculations. Round your answer to 2 decimal places.) a) Value of security in year 5? b) Value of security today? 2. The...

2. A 5-year annuity of $350 monthly payments begins in 10 years (the first payment is...

2. A 5-year annuity of $350 monthly payments begins in 10 years (the first payment is at the end of the first month of year 10, so it's an ordinary annuity). The appropriate discount rate is 12%, compounded monthly. What is the value of the annuity today?

Question