John Doe who plans to deposit $5,000 at the beginning of each year for the next seven years to save enough money for his daughter’s education. Please note that the ongoing rate of interest in the market is 5%. Determine the amount that John Doe will have at the end of seven years.
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John Doe who plans to deposit $5,000 at the beginning of each year for the next seven years to save enough money for his daughter’s education. Please note that the ongoing rate of interest in the market is 5%. Determine the amount that John Doe will have at the end of seven years.
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- Two annuity dues in perpetuity have a common present value of $2, 000 and a common effective annual interest rate i. The first annuity makes payments of $100 at the beginning of every three years and the second makes payments of X at the beginning of every three months. Find X.The present value of a perpetuity paying $20 at the end of every four years is $43. Find i.A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $3,000. Each year after that, you will receive a payment on the anniversary of the last payment that is 4% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 15% per year. a. What is today's value of the bequest? b. What is the value of the bequest immediately after the first payment is made? ARCKICHI a. What is today's value of the bequest? Today's value of the bequest is $(Round to the nearest dollar. b. What is the value of the bequest immediately after the first payment is made? The value of the bequest immediately after the first payment is made is $ (Round to the nearest dollar.)
- Suppose a relative has promised to give you $1,000 as a wedding gift the day you get engaged. Assuming a constant interest rate of 5%, consider the present and future values of this gift, depending on when you become engaged. Complete the first row of the following table by determining the value of the gift in one and two years with interest if you become engaged today and save the money. Date Received Present Value Value in One Year Value in Two Years (Dollars) (Dollars) (Dollars) Today 1,000.00 In 1 year 1,000.00 In 2 years 1,000.00 Now complete the first column of the previous table by computing the present value of the gift if you get engaged in one year or two years. The present value of the gift is if you get engaged in two years than it is if you get engaged in one year.Calculate the present value of an annuity with monthly deposits of $2,000 at 5% for 20 years. Discuss how the present value of an annuity will change if the deposit is doubled?A state lottery gives a winner the choice of receiving the winning amount in equal monthly payments for 20 years or receiving a lump sum equal to the present value of an annuity with future value equal to the winnings. The winner selecting monthly payments will receive $4,000,000/240 = $16,666.67 each month for each million dollars of winnings. (Round your final answers to two decimal places.) (a) Find the present value of an annuity with monthly payments of $16,666.67, at an Interest rate of 5.2% for 20 years, for the winner who wants a lump-sum payment. $ X (b) In order for the lottery to be more profitable, it is decided to pay the winnings in equal monthly payments for 25 years. Find the monthly payments of $4 million in winnings. $ Find the present value of an annuity with those monthly payments at 5.2% for 25 years. $
- You are offered an investment that would earn $ 2,100 a year for 10 years. The first payment would be made in exactly 3 years. Knowing that the annual effective interest rates will be 7% for the next five years, 8% for the next two years and 6% afterwards, find the value of this investment today. Use FACTOR NOTATIONS in your calculations.1. Future and present values Suppose a relative has promised to give you $1,000 as a wedding gift the day you get engaged. Assuming a constant interest rate of 5%, consider the present and future values of this gift, depending on when you become engaged. Complete the first row of the following table by determining the value of the gift in one and two years with interest if you become engaged today and save the money. Date Received Today In 1 year In 2 years Present Value (Dollars) 1,000.00 Value in One Year (Dollars) 1,000.00 Value in Two Years (Dollars) 1,000.00 Now complete the first column of the previous table by computing the present value of the gift if you get engaged in one year or two years. The present value of the gift is if you get engaged in one year than it is if you get engaged in two years.Suppose Crystal Wilson wants to accumulate $1,000,000 by the time she retires in 40 years. If she earns 10% on her investments, how much must she invest each year in order to realize her goal?
- Trevor's starting salary at his new job is $40,000. His company gives a performance raise of 5% each year. If Trevor continues in the same position and always receives the performance raise, in how many years will he double his salary?Josh is required to pay P57,000 in 15 days or P60,000 in 60 days. Find theannual rate of interest1. How much is the total value of all these presents worth today?2. How much is the future value of all these presents at the end of 12 years?3. If Tita Rhea agrees to give her these amounts annually forever, how much is its total value worth today?4. If the presents are each made continuously throughout the year at a rate of P, multiply the present value in #7 by a suitable adjustment factor (d/δ) to determine its total present value. Type the resulting amount below.