If $60,000 is paid at the end of each year for 13 years, calculate the equivalent...

If $60,000 is paid at the end of each year for 13 years, calculate the equivalent single payment now (P) if interest is 9% pa effective. Give your answer in dollars and cents to the nearest cent.

Expert Solution

Given:				Years	Discouting factor
Annual amount=	$60,000			1	0.9174	(1/1.09)^1
*Equivalent single payment= 600007.4869**	2	0.8417	(1/1.09)^2
=	449,214			3	0.7722	(1/1.09)^3
				4	0.7084	(1/1.09)^4
				5	0.6499	(1/1.09)^5
				6	0.5963	(1/1.09)^6
				7	0.5470	(1/1.09)^7
				8	0.5019	(1/1.09)^8
				9	0.4604	(1/1.09)^9
				10	0.4224	(1/1.09)^10
				11	0.3875	(1/1.09)^11
				12	0.3555	(1/1.09)^12
				13	0.3262	(1/1.09)^13
				Annuity factor	7.4869

jeff jeffy answered 1 year ago

If a business manager deposits $60,000 in a bond fund at the end of each year...

If a business manager deposits $60,000 in a bond fund at the end of each year for twenty years, what will be the value of her investment: a. At a compounded rate of 6 percent? b. At a compounded rate of 4 percent? What would the outcome be in each case if the deposits were made at the beginning of each year?

Sumeet has a 13 year annuity that pays at the end of each year. The first...

Sumeet has a 13 year annuity that pays at the end of each year. The first payment is $2000 and the payments grow by R = 5% per year. Interest rates are r = 6% annually. a) How much is Sumeet's annuity worth? Consider the following two options: Option A: An annuity with the same number of payments, only each payment is twice the payment of his current annuity. Option B: An annuity where the initial payment is the same...

Calculate the present value of $1 million paid at the end of every year in perpetuity,...

Calculate the present value of $1 million paid at the end of every year in perpetuity, assuming a rate of return of 10% and a constant growth rate of 6%.

Find the present value of $1000 paid at the end of each month for 5 years...

Find the present value of $1000 paid at the end of each month for 5 years at 12% compounded semi-annually If possible, please use in terms of a financial calculator

Assume all salaries are paid at the end of each year; evaluate the three options for...

Assume all salaries are paid at the end of each year; evaluate the three options for peter option 1. Stay in his current job Annual salary $520,000 and his salary is expected to increase by 5.25% per year for 38 more years until retirement. Peter's remuneration package includes base salary and medical and dental health care insurance plans. Assume individual income tax rate is 20%. Option 2. Nanyang business school full-time MBA 1 yr plan Tuition fee is $55,000, books...

An investment will pay $16,100 at the end of each year for eight years and a...

An investment will pay $16,100 at the end of each year for eight years and a one-time payment of $161,000 at the end of the eighth year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Determine the present value of this investment using a 6% annual interest rate. (Round your answer to the nearest whole dollar.)

If $1000 is deposited at the end of each year for 5 years into an ordinary...

If $1000 is deposited at the end of each year for 5 years into an ordinary annuity earning 7.59% compounded annually, construct a balance sheet showing the interest earned during each year and the balance at the end of each year. Complete the balance sheet. Period Amount Interest Balance 1 $1000.00 2 $1000.00 3 $1000.00 4 $1000.00 5 $1000.00 (Round to the nearest cent as needed.)

A 13-year annuity pays $1,400 per month, and payments are made at the end of each...

A 13-year annuity pays $1,400 per month, and payments are made at the end of each month. The interest rate is 12 percent compounded monthly for the first Five years and 11 percent compounded monthly thereafter. Required: What is the present value of the annuity? A) $1,343,944.86 B) $109,755.50 C) $111,995.40 D) $152,061.20 E) $114,235.31

A 13-year annuity pays $1,100 per month, and payments are made at the end of each...

A 13-year annuity pays $1,100 per month, and payments are made at the end of each month. The interest rate is 9 percent compounded monthly for the first five years and 6 percent compounded monthly thereafter. What is the present value of the annuity?

An investment will pay $150 at the end of each of the next 3 years, $200 at the end of year 4, $350 at the end of year 5, and $550 at the end of year 6.

An investment will pay $150 at the end of each of the next 3 years, $200 at the end of year 4, $350 at the end of year 5, and $550 at the end of year 6. If other investments of equal risk earn 9% annually, what is the present value? Its future value? Do not round intermediate calculations. round your answers to the nearest cent.

Question