Find the future value of annuities

Assignment Help Business Management
Reference no: EM132932883

Marian Kirk wishes to select the better of two 15-year annuities, C and D. Annuity C is an ordinary annuity of $3,500 per year for 15 years. Annuity D is an annuity due of $3,200 per year for 15 years.

i. Find the future value of both annuities at the end of year 10, assuming that Marian can earn (1) 12% annual interest and (2) 22% annual interest.

ii. Use your findings in part (i) to indicate which annuity has the greater future value at the end of year 15 for both the (1) 12% and (2) 22% interest rates.

iii. Find the present value of both annuities, assuming that Marian can earn (1) 12% annual interest and (2) 22% annual interest.

iv. Use your findings in part (iii) to indicate which annuity has the greater present value for both (1) 12% and (2) 22% interest rates.

v. Briefly compare, contrast, and explain any differences between your findings using the 12% and 22% interest rates in parts (ii) and (iv).

Reference no: EM132932883

Questions Cloud

What would the price of bonds look like if terrorism stopped : 1. What would the price of bonds look like if terrorism stopped? Describe and provide an example.
Calculate the net price to the retailer : A wholesaler listed a food additive for $16.00 per kg. Last winter, he offered 15.00% and 5.00% discounts to a retailer. Calculate net price to the retailer
What is the irr of the investment under consideration : Assume an individual makes a lump sum investment at the beginning of year one of $2,123. The expected return on this investment received at the end of year 8 is
Calculate b profit : Three friends, A, B, and C, start a business with investments in the ratio of 4 : 1 : 5, If A's profit was $16,000 in the first year, calculate B profit
Find the future value of annuities : Marian Kirk wishes to select the better of two 15-year annuities, C and D. Annuity C is an ordinary annuity of $3,500 per year for 15 years. Annuity D is an ann
What is the present value of the stream of payments : Mr. Martin Mathur has been awarded with $30,000,000 for his outstanding performance. His winnings will be paid to him in 31 equal annual installments with the f
Calculate the average rate of return : i. Calculate the average rate of return for each stock during the period 2011 through 2015.
Estimate the value of the common stock : The required return on the common stock is 14%. Estimate the value of the common stock under each of the following assumptions about the dividend:
What is the overhead rate per machine hour : What is the overhead rate per machine hour if the number of machine hours is used as a single cost driver under traditional costing system

Reviews

Write a Review

Business Management Questions & Answers

  Display the deque contents

Write a program that reads in a sequence of characters and stores each character in a deque. Display the deque contents.

  What is the payback period of project-zion manufacturing co

Zion Manufacturing Co. is considering a new inventory system that will cost $450,000. The system is expected to generate -$50,000 (negative) in year one,

  Analysis of hofstede cultural dimensions

For this assignment, please read the introduction as well as chapters 1 and 2 of When Teams Collide: Managing the International Team Successfully as well as the article, "The Cultural Approach to the Management of the International Human Resource..

  Improve the operations at the company

What structural design changes might be undertaken to improve the operations at the company?

  What is the firm current debt-equity ratio

Rio Tinto Inc., which is a Canadian company and one of the global leaders in aluminum mining and production, is re-examining its capital structure and whether

  Think about the use of lists in everyday life

Let's think about the use of Lists in everyday life. Provide an example and discuss the advantages and disadvantages of using these types of Lists.

  Describe how such vagueness and ambiguity influences

Describe how such vagueness and ambiguity influences understanding and Identify what is vague and what is ambiguous about each

  Why did amazon go global

Why did Amazon go global? Which are the factors that pushed them to internationalize?

  Leadership Training Program Assignment

Leadership Training Program Assignment - create a training that will help the new leaders understand the difference between leadership and management

  Component of the research project

A 10-15 slide (not including title or reference slides) Power point presentation is a required component of the research project. Slides should not have more than 50 words of text and instead should have pictures, media, large fonts and should be ..

  Description of current management challenges

Describe at least 1 significant issue or challenge that this organization is currently facing. Description of current management challenges and current function

  Briefly describe the new equipment purchase

Consider a new piece of equipment that your company will most likely need. Briefly describe the new equipment purchase.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd